What should you do if you need to reverse a previous inventory adjustment?

To reverse a previous inventory adjustment, creating a new adjustment is the appropriate action. This is because accounting integrity requires that all adjustments remain documented for transparency and accuracy of your financial records. Editing or deleting the previous adjustment would lead to discrepancies and could violate accounting principles, making it difficult to trace inventory changes over time.

By creating a new adjustment, you effectively document the reversal while ensuring that the original adjustment is preserved in the system. This approach maintains the integrity of your financial data, allowing for accurate reporting and analysis of inventory levels. It is a best practice to retain all records of adjustments to provide a clear audit trail.