@anna112 

Just to confirm, cash basis accounting does not have inventory, so the only accurate inventory valuation on cash basis should be QB showing $0 in inventory.  Only accrual basis accounting has inventory. 

The issue is that QB can only accurately switch between cash and accrual (as it relates to inventory) if all inventory entries are item-based.  This is the same as QB Desktop.  Any entries to inventory such as a journal entry or an entry on a bill, expense, etc. posted directly to your Inventory Asset account will bypass QBs ability to remove the inventory on cash basis reports.  If you have a beginning balance entry, QB must have created an entry that bypasses the item/product.  Are you able to locate the beginning balance entry that QB created?  If so, can you run a Transaction Journal report on it?  I'm curious to see what entry QB created and whether there's a workaround for it.