Hi JSTL,

I hope to be able to clarify the situation a bit so that you gain a better understanding of how QuickBooks Desktop is calculating your expenses. Having balanced books and knowing where your numbers stand is essential for running your business, so I want to help you sort this out.

As items and services that we're purchasing, expenses should not affect the COGS or income accounts as those relate to inventory items and services sold. When you go into the Chart of Accounts (shortcut CTRL + A) and double click the Cost of Goods Sold account, you should only be seeing invoices and sales receipt transactions there. I recommend taking a look at the Understand Inventory Assets and COGS Tracking article to learn more about this process in the program.

Another great resource for these kinds of questions is an accountant. We have several accountant users here in community who may be able to share their insight, or you can speak with your accountant directly about it. To find an accountant familiar with QuickBooks Desktop, use your postal code to search our Find an Accountant site and get connected.

Let me know if you have more questions. Enjoy your day!