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Can new Account Detail Type be added in COA? e.g., COGS does not allow distinction between Purchases and Materials/Supplies as Sched C does.
I think it's odd that there are so many other options for COGS Detail Type, but not Purchases.
The only thing that keeps me hung up on the Account Details is the question of why they're even included when they have no (apparent) use? If that field is going to even be there, I think there ought to be some function. For instance, when I look at my Accounts, I'd like to see something useful, like even "Account Description", which I can't see unless I edit an account.
As far as Purchases, I've read any support article I can find, and it does seem that it's preferably an Asset account for the periodic inventory method. However, data seems to be moved (via something like a journal entry) into a COGS account only once an inventory is done - so if I do an annual inventory, it would seem that any COGS data would remain blank through that interval on my P&Ls. Or am I missing something?
As far as I can see, if my inventory stays the same every year (which doesn't quite happen, of course), my COGS would be accurate simply by entering Purchases into COGS accounts - which would give me up-to-date (though, admittedly, not exact) information on my P&L through the entire year. Simultaneously, I could have my total inventory value in an Asset account, and create annual journal entries at time of inventory to adjust both the Inventory Asset account and the COGS accounts. Again, I may well be missing something.
You're certainly correct as far as freight costs. I suppose I've taken another step away from what's probably accepted accounting practice and just lump the freight in with item cost, so have no use for it. As an example, one box supplier I've used sells boxes at amazingly low prices, but charges FAR MORE than the box cost for the freight - while another charges more for each box, but provides free shipping. There's no way I can determine a "best price" without considering both - or calculate a retail price (and I have yet to find a POS system that factors freight as well as pure cost of a good into retail price calculation).
IMO, the "Detail Type" is a pointless field. It may be there just to assist users in naming the account. The field doesn't even exist in QB Desktop and that is a far superior product IMO.
You are exactly right that if your beginning inventory and ending inventory are the same, then your purchases account will equal your COGS for the period (month/year). And, any freight you have allocated to purchases will be fully expensed. However, a 'Purchases' account should always be a temporary asset account - not an expense or COGS account. You would create a journal entry to reduce (credit) purchases and increase (debit) COGS at period-end by the same amount if there is no change in inventory level. When using periodic inventory, you needn't take a physical inventory, you can estimate COGS via the gross profit method but that's a topic beyond the scope of this post probably.
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