When would an inventory adjustment affect Cost of Goods Sold?

AI generated answer (using internal Slack threads):

An inventory adjustment would affect the Cost of Goods Sold (COGS) in a few scenarios: 1. Negative to Positive Inventory: If an inventory item's quantity goes from negative to positive due to an inventory adjustment, a COGS adjustment will occur. This is because when the inventory was negative, the system would have recorded a COGS based on the last known cost. When the inventory goes back to positive, the system recalculates the COGS based on the new cost, leading to a COGS adjustment. 2. Change in Average Cost: If there's a change in the average cost of an item due to an inventory adjustment, a COGS adjustment will occur. This is because the system recalculates the COGS based on the new average cost. 3. Inventory Revaluation: If you revalue your inventory without changing the quantities, the system will adjust the COGS based on the new value. This is because the system recalculates the COGS based on the new value of the inventory. 4. System Changes: Sometimes, system changes can trigger a COGS adjustment. This could be due to a change in a value or date that causes NetSuite to revalue a component/item. Remember, these adjustments are made to ensure that the cost valuation is correct. For transactions on the same date, the system will use a hierarchy: first inventory increasing transactions (like purchase receipts, vendor bills, adjustments), then inventory reducing transactions (like sales order fulfillments, invoices, cash sales, and inventory adjustments). ****** Disclaimer: This response was generated by an artificial intelligence assistant based on previous conversations from multiple Slack channels, and may contain inaccuracies or mistakes. ******