Skip to main content
M
malonerepair
April 13, 2024
Question

Buying an automotive part from and automotive parts store

  • April 13, 2024
  • 1 reply
  • 0 views

When I purchase a part from an auto parts store and add it to my inventory, do I list it under the Expense Account - Cost Of Goods Sold? Then, when I take the part from the inventory and sell it to a customer then does it get recorded under the Income Account - Sales Of Product Income?

 

Thank you,

Malachy

1 reply

Service
Service
April 13, 2024

When I buy a part from anywhere, the expense account is Purchases-COS. When I sell it, the income account is Sales of Product Income. I figure Cost of Goods Sold at the end of year, for tax purposes. Speak to your accountant about any alternate ways to handle this issue. 

 

The most common way to figure Cost of Goods Sold is as follows:

 

Beginning year Inventory value

Add Purchases (total of Purchases-COS from Quickbooks)

subtract End of Year Inventory value

= Cost of Goods Sold for tax purposes

 

Obviously, this means you have to do an inventory at the end of the year. The end of year inventory becomes the beginning year inventory value for the next year. 

Terms & ConditionsAccessibility statement