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Experienced Member

Question on entry Transaction Number #1462 in the Sample File - Rock Castle Construction

I have Desktop Premier 2019.  I download the quickbooks sample file for product based business.  The Sample Company is Rock Castle Construction.
 
I have a question on a transaction in this sample file.  I do not understand why Cost of Goods Sold would be on this Transaction Journal entry.
 
The attached pdf has snapshots of the Bill and the Transaction Journal.
 
The debit and credit of $4,368.51 is the question.  I do not see how on this entry there would be a debit to Cost of Goods Sold $4,368.15 and credit to Inventory $4,368.51.
 
Couple notes:  the Interior Door Kit is an Inventory Assembly Item and Wood Door Exterior is an Inventory Item.   I would not think that would make a difference.  To me the $4,368.15 debit and credit should not be on the entry.
 
What is the explanation for this?
 
Thank you for your help,
 
Steven
1 Comment
QuickBooks Team

Re: Question on entry Transaction Number #1462 in the Sample File - Rock Castle Construction

Greetings, @Steven_2019.

 

I can provide some details and explain this further.

 

The Cost of Goods Sold is found on every Transaction Journal report. This is because all items tracking inventory has a COGS account.

 

In addition, the debit and credit amount on the report shows the increase in your asset count and the decrease in your money.

 

Also, when buying or selling inventory items, included in the affected accounts are Inventory Asset and COGS. And the amount on those accounts is based on the Average Cost of the items.

 

Average Cost is then calculated by adding the average cost of all items divided by the number of items.

 

For further guidance, you can refer to this article: Understand Inventory Assets and COGS Tracking.

 

Feel free to leave a comment below if you have any other questions.