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cost of goods sold
Question: Is COGS used only if we are tracking inventory? We purchase stocks in bulk and our QBO account doesn't include inventory tracking, is there another way to track them?
Hi there, marumir05. Let me share some information on how inventory works in QuickBooks Online (QBO).
COGS is often associated with inventory tracking. This account is used to track all of the costs associated with the items you sell, which allows you to calculate gross profits accurately.
In businesses that don't maintain an inventory, COGS is calculated based on the cost of materials used in producing the goods or services sold during the accounting period. This may include direct labor costs incurred in the production process.
Since your QBO account doesn't have an inventory tracking feature, I suggest consulting an accountant for more guidance on how to handle the stocks you've purchased in bulk.
You may want to review this article to learn more information on how to track your inventory in QuickBooks Online: Set up and track your inventory in QuickBooks Online.
Let me know in the comments if you have concerns about inventory tracking in QBO. I'm always around to help. Take care and I wish you continued success.
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