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Anonymous
Not applicable

Adding an expense to an inventory item

I need some help to see if I can add an expense to an inventory item. I purchase heavy equipment. When i purchase a piece of equipment I create a PO for the purchase price and add it to inventory. Sometimes I have to repair these inventory items and need to see if I can add the expense of the repair to the cost of the inventory item and have it not effect my cost of goods for the given month 

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QuickBooks Team

Adding an expense to an inventory item

Hi there, @Anonymous.

 

Welcome to the Community. Allow me to provide some information about adding an expense to an inventory item in QuickBooks Desktop.

 

Adding an expense to an inventory item in QuickBooks Desktop will automatically affect your Cost of Good Sold. This is because the expense is associated with COGS which reflects the cost of materials and goods held in inventory and then sold. However, to make sure that your books are accurate, I'd suggest reaching out to your accountant for further assistance.

 

Also, you can check out this article about Inventory and COGS tracking in QuickBooks for your future reference: Understand Inventory Assets and COGS tracking.

 

Don't hesitate to let me know if I can be of additional assistance. Cheering your business to continued prosperity.

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Level 15

Adding an expense to an inventory item


@BettyJaneB wrote:

Adding an expense to an inventory item in QuickBooks Desktop will automatically affect your Cost of Good Sold. This is because the expense is associated with COGS which reflects the cost of materials and goods held in inventory and then sold.

 



[removed by moderator]  this makes no sense.

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Level 15

Adding an expense to an inventory item


@Anonymous wrote:

I need some help to see if I can add an expense to an inventory item. I purchase heavy equipment. When i purchase a piece of equipment I create a PO for the purchase price and add it to inventory. Sometimes I have to repair these inventory items and need to see if I can add the expense of the repair to the cost of the inventory item and have it not effect my cost of goods for the given month 


Assuming you buy and sell heavy equipment, so this item is indeed an inventory item

 

You buy the item using a dummy bank account called inhouse or something.  Then all repairs to get it ready for sale are also entered using that same dummy bank account as the expense (reason) for the transaction

 

when the item is ready for sale, create the item in inventory , zero qty and zero cost

then using the dummy bank account "buy" the inventory item for the total amount in that dummy bank acccount

 

cost of an item can not be changed in QBO once you have it stocked

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Level 10

Adding an expense to an inventory item


@Rustler wrote: 

cost of an item can not be changed in QBO once you have it stocked


It says Desktop, so then I think there is another way, using a dollar inventory adjustment, right?

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Level 15

Adding an expense to an inventory item


@Malcolm Ziman wrote:

@Rustler wrote: 

cost of an item can not be changed in QBO once you have it stocked


It says Desktop, so then I think there is another way, using a dollar inventory adjustment, right?


People do that in desktop, and if they are careful and the timing is right, it works - but it can also mess up COGS if there was a sale.

 

And an auditor is going to see a value adjustment and want to see the paper trail for it, and the why - just makes no sense to tempt fate, or take the chance on messing up inventory  average cost.

To each his own

 

Just because you can do something in QB, does not mean it should be done

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