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kristyjones
November 7, 2023
Question

Record Inventory without a COGS account

  • November 7, 2023
  • 1 reply
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We are using quickbooks on a farm and our crop income doesn't have an actual COGS account.  How do we work around this in quickbooks and still be able to track our inventory with the inventory feature?  I thought I could create a billable inventory income account that it would flow in and out of-but it won't let me create an income account?  Help

1 reply

JessT
JessT
November 7, 2023

Hi there, Kristy!

 

Welcome to the QuickBooks Community! Let me explain as to why COGS (Cost of Goods Sold) is used as a default expense account on inventories.

 

The expense account for inventory items is typically set to COGS in accounting. COGS represents the direct costs associated with producing or acquiring the goods a company sells. This helps track the costs related to the sale of goods and calculate gross profit.

 

On the other hand, I understand that accounting practices can vary, so some businesses may use different expense accounts for inventory items. If you have questions about the accounting setup in QBO, I suggest consulting a professional accountant or bookkeeper. You can tell them about other options like how to journal the transactions, given that COGS/Cost of Sales is not replaceable on item profiles.

 

If you have other questions about managing the accounts of your inventory items, feel free to go back to this thread. I'll be happy to help you again.

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