question regarding closed purchase orders and accounts payable

SUGGESTED

Hi there

I have a scenario where i had a purchase order (PO # 1249)  to a vendor for 1,000 units, which was received in and thus the purchase order was closed. The corresponding accounts payable amount was still open.

However, we found that out of the 1,000 units, there were 200 units that were defective. What i wanted to do was use the Receipt Adjustment module to modify the PO to only receive 800 units. I did this and the inventory reflects the 800 units. However, PO # 1249 still remains closed and the accounts payable amount to the vendor is still open based on the 1,000 units received.

I then tried to re-open the PO via Maintain Purchase Orders and edit the line item to reflect 800 units received and 200 units cancelled. However, the accounts payable still does not update to reduce the amount i owe the vendor.

How do i ensure the reduction in inventory is properly reflected with a corresponding reduction in accounts payable amount to that vendor? Do i need to go through a debit memo to do so? My concern is with a debit memo, it does not reflect a reduction in  cost of goods on my income statement (i.e. it still assumes i received in 1,000 units in its calculations).

Thank you in advance!

Calvin