The Balance Sheet report draws information from the accounts whether they are associated with items or not. The Inventory Valuation reports, however, draw information from items only.
This means that transactions using inventory items show on both reports but transactions without inventory items show only on the Balance Sheet report.
Some examples of transactions that will show on the Balance sheet but not the Inventory Valuation reports are as follows:
- Bills, checks credit card charges with the Inventory Asset account on the Expenses Tab.
- Journal entries using the Inventory Asset account.
- Inventory adjustments offset to the Inventory Asset account instead of a COGS account.
