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DCTAust
Level 1
posted
‎February 02, 2020 11:05 PM
last updated ‎February 02, 2020 4:05 AM

Adding Inventory

Hi

 

We are starting a new business and we already have some pre existing stock which was purchased privately however that stock will now be made availble to the Company LLC.

 

How would we go about entering this inventory.. I was reading online was advised not to bring it in under Owners Equity as it won't show up as COG when it's sold?

 

any insights would be fantastic.

 

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2 Comments 2
Rea_M
Moderator
Moderator
‎February 03, 2020 01:18 AM

Adding Inventory

Congratulations on your new business, DCTAust. 

 

Inventory items will post under your inventory asset account by default. When the goods are sold, assign it to the cost of sales account.

 

Let's record your pre-existing stocks so you'll be able to track the cost of goods your new business has. Make sure to turn on your inventory tracking first so you can add one.

 

Once ready, enter your stocks by following these steps:

 

  1. Go to the Sales menu.
  2. Select Products and Services.
  3. Click the New button.
  4. Select Inventory in the Product/Services information section.
  5. Add a name, SKU, or category and other needed information.
  6. Click Save and close.

 

You can also consult your accountant for further guidance in recording your goods and how you'll categorize them in QuickBooks Online.

 

If you wish to learn about the First In, First Out (FIFO) idea in QBO, you can refer to this article: What is FIFO and how is it used for inventory cost accounting?. This contains scenarios that'll help you understand the concept and how it works in the system.

 

Please let me know if you have other inventory concerns by dropping a comment below. I'm just around to help.

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AnjaliGeneration
Level 2
‎April 05, 2020 02:16 PM

Adding Inventory

Yes, I’m wrestling with exactly this problem. Maybe it’s because I’m no accountant but it seems to me that if I just put the current inventory in QBO, then that product cost me nothing to purchase.

An alternative view of the issue is that the new Bank account contains profit from sales already made this FY but the product was purchased privately, so am I supposed to adjust COGS for that previous business?

I’ll keep tabs on you thread and see if there are any other answers. Sorry I can’t help you myself. 

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