Would really appreciate some help with this. My understanding is that Quickbooks uses FIFO for Cost of Goods and it's based on actual sales and expensed as each product is sold. Am I correct in my understanding?
All of the guidance I can find uses the formula Beginning Inventory + Purchases - Ending Inventory
I would prefer to use actual sales to track Cost of Goods as this seems a much more simple way of doing it.
Hello ben1985, The cost of goods sold is the cost of acquiring or manufacturing the items you sell. So if stock is acquired at a cost and that doesn't change then it will record as above. If you then purchase more stock at a different price QB will work on a First in first out basis(FIFO), when you record a sale the product will work out the cost for you and adjust the inventory quantity. More information on this can ve found here