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Client in Truck Parts resale business and has more than 1500 items. Clients buy truck parts from different vendors and sometimes the cost price is either lower or higher from the same vendor or different. For example, the client buys parts at one price like 100 ea @$5.00 on 12/01/23, and goes buys the same part from another vendor @$4.95 each on 12/15/23. How will QBO determine which one is FIFO? Client using QBO Plus. Please advise.
Hello schand4462,
I'm here to enlighten you on how the system tracks inventory.
QuickBooks Online records your purchases using the FIFO (First In, First Out) concept. In your case, since you first entered the parts that cost $5.00, these items will be the FIFO.
Once sales of inventory items are created, the system will adjust your assets and Cost of Goods Sold (COGS) accordingly. Thus, it will automatically detect the $4.95 cost.
You can check this article to know more: What is FIFO and how is it used for inventory cost accounting?
Furthermore, you can run some inventory reports to see your sales and inventory status: See your best sellers, what’s on hand, the cost of goods, and more.
I'm always around whenever you have concerns about inventory tracking.
"How will QBO determine which one is FIFO?"
QBO will sell the 100 pieces purchased on 12-1-23 at a COGS of $5.00/ea. first. Then, QBO will sell the next 100 pieces at a COGS of $4.95/ea.
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