The Inventory Offset account is a liability account created by QuickBooks when you use the Enhanced Inventory Receiving (EIR) feature (available in QuickBooks Enterprise only).
This account functions as a clearing account between Item Receipts and Bills. Once a Bill and Item Receipt are both entered, the amounts for those transactions are cleared from the Offset account.
Sometimes this account shows a balance appears to be too high or too low and needs to be reviewed.
Create a report to help reconcile the Inventory Offset account:
NOTE: Some users may be surprised at the existence of this account. Even if users enter items on a bill directly, it will still post transactions to the Inventory Offset account. You MUST do the extra step of an Item Receipt, then enter the bill against it to relieve the Inventory Offset account.