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A
arkvalleyinfo
February 7, 2019
Solved

Do I categorise all my outgoings for stock as stock assets?

  • February 7, 2019
  • 3 replies
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I find it difficult categorising my transactions with the right term. I run a shop, hence buy a lot of stock. Do I categorise it as stock asset or something else? When I was using Quickbooks self-employed I just categorised it as cost of goods sold. But here I find it harder to choose a category.

Best answer by Rustler

stock that you keep on hand to sell or make something to sell is typically kept as inventory

check your company settings to see if this is in your version of QBO

gear>settings>company settings
sales>products & services
and turn on qty tracking (inventory)
and
in company settings>expenses>bills & expenses turn on the items table and purchase orders. 

Then when you enter an expense or bill, about half way down the left side is a title "item Details" click that and a table opens where you can select the item, qty and item total cost for purchasing inventory

and see the pic for a new inventory item set up


3 replies

Rustler
RustlerAnswer
February 7, 2019

stock that you keep on hand to sell or make something to sell is typically kept as inventory

check your company settings to see if this is in your version of QBO

gear>settings>company settings
sales>products & services
and turn on qty tracking (inventory)
and
in company settings>expenses>bills & expenses turn on the items table and purchase orders. 

Then when you enter an expense or bill, about half way down the left side is a title "item Details" click that and a table opens where you can select the item, qty and item total cost for purchasing inventory

and see the pic for a new inventory item set up


Rustler
Rustler
February 7, 2019

@ damage

In the chart of accounts you can create an expense account named COGS, it will list on the P&L with all other expenses

Only QBO+ has inventory, so in essentials you need to use periodic inventory.  There are two ways to do periodic inventory, choose one and stick with it, you can not mix and match

1. (my preference) Create an asset account called purchases and post all purchases of item for resale to that account.  Periodically, weekly, monthly, etc value the inventory on hand, subtract that value from the amount shown in the purchases account and do a journal entry for the answer to the subtraction
debit COGS for that value
credit purchases for that value

OR

2.  Post all purchases to COGS.  Periodically, but at least at the end of the year, you value the inventory on hand and do a journal entry.
debit the asset purchases account for that value
credit COGS for that value

Print the P&L
then reverse the journal entry
debit COGS for that same value
credit the asset purchases account for that value

This last journal entry, moves the value of what was on hand at the end of year back to COGS so the cost will be counted against the new year sales.


    qbteachmt
    qbteachmt
    February 7, 2019

    "When I was using Quickbooks self-employed I just categorised it as cost of goods sold. But here I find it harder to choose a category."

    If you have Quick Turnover, and only Buy to immediately sell, then it still is appropriate to post to COGS. That just means "expensed" and not really On Hand over any length of time. The goal is to match the sales to the COGS date, or you really do have product sitting on the shelf over time and should be carrying it as inventory, even if you want to manage this as Generic or Periodic Inventory value.

    You need to ask your own Accountant about these facts.


    A
    arkvalleyinfoAuthor
    February 7, 2019
    But that is exactly my problem. Quickbooks Essentials/Online does not have a COGS category.
      A
      atki
      May 6, 2019

      Have you found a solution to this yet?

       

      I have the same issue as all my stock is an asset and want to know what I need to do on quickbooks online at the end of the financial year or should I do something monthly? I too do not track inventory....I purchase stock assets and then sell to get income. How do I get this to shoe on my P&L or should I leave it separate?

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