Sales > Recording sales with insufficient on-hand item quantities > Allow negative on-hand item quantities
If you want, you can set a preference to allow the recording of sales with insufficient on-hand quantities. With this preference set, the sale of an item that is not in stock results in a negative on-hand item quantity and value.
Allowing negative item amounts to be recorded in your inventory affects the reporting of inventory values and cost of goods sold. This feature may not be suitable for some businesses. Consult your accountant or financial adviser before using this option.
When you record the sale of an item with insufficient on-hand quantities, an estimated item cost is recorded for the sale. The estimated cost used depends on the item information available, as described in the following table.
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Average cost
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Average cost is used if you have sufficient on-hand stock for which an average price can be determined. For example, if you have ten units of an item on-hand, but make a sale for 12 units, average cost is based on the value of the ten units in stock.
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Last cost is used if the average cost is unavailable. For example, if you have purchased an item before but currently have none on-hand, the last purchase price is used.
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Standard Cost
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Standard cost is used if you have never purchased an item before, and you have entered a standard cost in the item information card.
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Zero cost is used if you have never purchased the item before and you select this option when recording the sale.
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When you record a purchase to replenish the items, a journal entry automatically records the price variation between the estimated cost and the actual cost, if there is one.
To allow the recording of sales with insufficient on-hand item quantities
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Click the Inventory tab and select the Allow the Sale of Items with Insufficient On-Hand Quantities option.
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