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Beginning Balance Equity entries for inventory in QBD Pro 2020

Forum|Forum|4 years ago
February 20, 2022
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1. The beginning balances were entered as we put in the inventory as of 12/31/2021. The entry that was automatically done was DR Inventory Asset and CR Opening Balance Equity (was originally being tracked in Excel and balances matched).

2. QB automatically closed 2021.

3. Credit card statement comes in and some of the previously recorded inventory (was received prior to January but put on the credit card in January 2022). Since the inventory attached to this charge has already been accounted for (in the entry from 1 above), what is the entry to get the charge posted? I know I CR the credit card, but what account do I DR? I can't do Opening Balance Equity, because it's a normal CR balance, so is it COGS?

QuickBooks Desktop

Best answer by Rustler

When you buy inventory items, you select each item the qty and the total cost - that stocks the item.

When you do that you select either the bank to pay for it, or a credit card account

then you pay the CC. It makes no difference when the CC is paid, the date that counts is when you enter the charge.

The problem is that QB thinks you have the item on hand because you said you did with an opening balance, and now with a CC charge you are stocking more of that item.

If you are trying to use journal entries, stop. journal entries often do not work as expected and do not show in some reports. Additionally items are stocked by name, think of the names as sub accounts of inventory asset, so nothing gets posted to inventory asset. That is another reason you can not use journal entries, you can not select the item in a journal entry

Rustler

Beginning balances for inventory items should ONLY be entered if the item is on hand.

NO the CC does not offset to COGS, COGS is the item cost for things that are sold.

Buying inventory is a debit to inventory asset>item, and a credit to the CC. Never ever use inventory asset in any kind of transaction.

Use a quick report for the item, drill down on the opening entry and edit it to a zero on hand and zero cost. Then buy the items

B

beckellhAuthor

Thanks for your help; however, the items were bought PRIOR to 12/31/21 and were included in the inventory count on 12/31/21. The charge on the CC in question was paid on terms of Net30. I'm not trying to add anything to inventory, just figure out what the DR account should be so I can get the CC charges entered into the GL. I'm doing all this after the fact. My hubby was doing everything in Excel and I'm trying to get it all into QB so it's more accurate. We just started an online business last year and it took this long to convince him that QBs was a better and wiser choice. :-)

RustlerAnswer

When you buy inventory items, you select each item the qty and the total cost - that stocks the item.

When you do that you select either the bank to pay for it, or a credit card account

then you pay the CC. It makes no difference when the CC is paid, the date that counts is when you enter the charge.

The problem is that QB thinks you have the item on hand because you said you did with an opening balance, and now with a CC charge you are stocking more of that item.

If you are trying to use journal entries, stop. journal entries often do not work as expected and do not show in some reports. Additionally items are stocked by name, think of the names as sub accounts of inventory asset, so nothing gets posted to inventory asset. That is another reason you can not use journal entries, you can not select the item in a journal entry

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