Why doesn't selling an inventory product credit inventory and debit CoGS?

Hi there dgablehaus,

Making sure your transactions are entered properly is important for your books to balance. QuickBooks Online is a robust tool that can help keep track of the value of your inventory as well as the cost of the goods you sell. I can provide some insight into how the cost of goods sold works.

If the sale of an inventory item has no associated money movement within cost of goods sold as well as inventory asset accounts, it's because there was no associated value of this item from a purchase or initial value of the inventory. If the initial value of this inventory item is marked as 0 and there are no expenses or bills to increase the value of the inventory asset, there is no asset to move into the cost of goods sold once the sale is made.

The method QuickBooks Online uses to track inventory is called First In, First Out. The system takes into consideration that the first units of a certain item are the first to be sold, so the value of the cost of goods sold will change based on the value of the first of those items purchased. Here's an article that goes into details about First In, First out inventory tracking.

If you were to want to edit the initial cost as well as quantity, you can do so by following the steps provided in the article above.

If you have any other questions, feel free to reach out here.