Skip to main content
C
Carissa22
January 18, 2021
Question

How to account for inventory used in the business

  • January 18, 2021
  • 1 reply
  • 0 views

On occasion we have to use something from our inventory as a supply in our business.  Just wondering the best way to deal with this.  From a technical standpoint, it would have to be subtracted from our Inventory Asset account, the cost added as an expense to our Supplies account, and no income added to any account.  I supposed it could go as an expense on the COGS account but that's not really accurate as we didn't sell it to anyone.

1 reply

PatriciaT
PatriciaT
January 18, 2021

Hi Carissa22,

 

It's nice to see you back in the Community! The inventory system in QuickBooks Online is designed to meet all of your business needs. Making sure your inventory accounts properly reflects your tasks ensures accuracy across your books. I'll be happy to guide you with this.

 

I appreciate you providing details of what you're trying to achieve in the program. I hear you when you say having your business supply as an expense on the COGS account wouldn't be technically accurate as you're not technically selling the product. It seems you'd have to account for the inventory using a journal entry and adjust your inventory manually as well to make sure everything is perfectly aligned. An accountant will be the best resource to advise you on which route to take for your situation and how to take it. For that matter, I strongly encourage you to get in touch with your accountant. You can easily invite an accountant to your books or find one in your area. Just head to the My Accountant tab to get started, then select Find a pro to help.

 

I hope this helps! Don't hesitate to reach out if you need anything else.

Terms & ConditionsAccessibility statement