Thanks Richard but I don’t think returns work because the first invoice was marked as drop ship the inventory qty is still there. If I do a return I have doubled the qty and then if I copy the original invoice with no drop ship my Inventory qty is still overstated. I think Inventory Adjustment is the way to go.
On an interesting side note (at least to me) if you post a drop ship Invoice that has not had a PO drop ship process completed (in this case nothing) there would be zero costs attached to that Invoice. So far so good. If you enter an order and allow the system to allocate because you have items in stock a cost is attached to that line based on whatever costing method you use. If you then check the drop ship box and post that cost will be debited as a cost of goods sold and the credit will be the inventory offset account. They qty still remains in inventory in this scenario as well. One of those entries can’t be right and personally I think it is the later.