cancel
Showing results for 
Search instead for 
Did you mean: 
Announcements
Everything you need to know about banking in QuickBooks Online - Discover more
connorsimmons
Level 1

Should sold stock still be a current asset?

Hi there,

I have not long started my first company which is online retailing on Amazon UK, and I have zero experience in business or bookkeeping. I have just checked my balance sheet (below) and I see my stock is in current assets, which I believe is correct for the time being as it'll all be sold within 12 months. However, once that inventory is sold, should it stay in the current asset account or not? This is where I am getting really confused as I barely understand what I am trying to ask.

If someone can please let me know if I am doing this correctly or not, it would be greatly appreciated!

Thank you. 

 

balance sheet.jpg

 

3 REPLIES 3
GebelAlainaM
QuickBooks Team

Should sold stock still be a current asset?

Welcome to the Community!

 

 I understand the confusion you're having, @connorsimmons. I'll make sure to clarify things about the stock being sold in the current asset account in QuickBooks Online (QBO).

 

No, @connorsimmons, it won't stay in the Current asset account. The stocks from the current asset account that is sold will need to be transferred to the depreciation account since QBO doesn't automatically depreciate assets. Instead, we'll need to use the journal entries track depreciation manually. Also, calculating depreciation is a bit difficult. With that, I recommend consulting your accountant or a QuickBooks Certified ProAdvisor. Your accountant knows the best methods and ensures the accuracy of your books.

 

Once your asset is sold and ready to be recorded, feel free to check this article for guidance: Depreciate assets in QuickBooks Online. This includes the process of tracking depreciation. Although, you still need to talk to your accountant for guidance and bits of advice.

 

I'll be including these articles for more details and guidance about managing your accounts in QBO that can be helpful in the future:

 

 

Let me know if I answered your query or if you need further guidance with navigating to your QuickBooks account. It will be my pleasure to assist you. Have a good one!

PaulK4
Level 1

Should sold stock still be a current asset?

Is this answer only relevant to depreciation of Fixed Assets? The original post made clear it was Current Assets they were referring to, so I don't believe this answer is valid? I have the same query, I buy and sell second-hand furniture. If I record what I've bought as a Current Asset, how does that get taken off from Current Assets when I sell that furniture item?

AileneA
QuickBooks Team

Should sold stock still be a current asset?

Hi there, PaulK4.

 

When you purchase an asset for your business, such as furniture, you must record it in QuickBooks Online as a Current Asset. You can easily keep track of all your assets and their values this way. When you sell the item of furniture, you can remove it from your Current Assets by recording the sale and removing it from the asset account.

 

It's important to note that products you sell are not considered Fixed Assets in QuickBooks Online. Fixed Assets are long-term assets used in producing goods or services, such as buildings, equipment, and vehicles. On the other hand, products you sell are considered inventory and tracked differently in QuickBooks Online.

 

You'll need to set up an asset account to track your assets' current value and depreciation; you can create an asset account in QuickBooks Online. This account will help you keep track of the value of your assets over time as they depreciate. 

 

Set up an asset account: 

 

  1. Click the Gear icon, then choose Chart of Accounts.
  2. Tap New.
  3. From the Account Type dropdown, select Tangible Assets.
  4. Select the option that closely describes the asset from the Detail Type dropdown.
  5. Name the account, then choose the Track depreciation of this asset checkbox.
  6. Enter the current value of your asset and the as-of-date in the Original cost field. If recording the loan, leave this blank.
  7. When you're done, click Save and Close.
     

For more details on tracking fixed assets in QuickBooks Online, please read this article below: Set up an asset account in QuickBooks Online.

 

However, If you need clarification on recording the sale of an asset in QuickBooks, it's always a good idea to reach out to your accountant for guidance. They can help you ensure that second-hand furniture sales are correctly recorded in your books and prevent errors or inconsistencies.

 

If you still need an accountant, QuickBooks has a helpful feature that allows you to search for accountants near your area. Input your zip code, and choose from a list of the best accountants available. QuickBooks Certified ProAdvisor

 

I'm still here if you need further assistance or clarification while working on the process of stock being sold in the current asset account. Just post your concerns below, and I'll take care of them. Have a great day!

Need to get in touch?

Contact us