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Level 1

Setting up a bar, Alcohol sales - how to put them against the alcohol asset

So, say we spend 10k on alcohol purchases through our vendors. This goes as an asset, but our sales don't seem to apply to that. Furthermore, obviously the sale of the product far exceeds the cost, so I'm just not sure how to set this up in a chart of accounts to reflect accurately what is going on here - I realize it has to be an asset but it just seems like an expense/cost sort of thing in my mind, so if anyone could elaborate on what I should utilize in the chart of accounts to make this work properly, I would be most grateful

3 Comments
QuickBooks Team

Setting up a bar, Alcohol sales - how to put them against the alcohol asset

I'm here to help enter your purchases and put them against the alcohol asset, Andrew85Bar.

 

QuickBooks Online (QBO) lets you add everything you buy and sell. You can enter those purchases in your inventory to hit the correct asset and expense accounts.

 

When you purchase inventory, it increases the assets and generates an expense. When you sell them, it goes to your Cost of Sale that appears under an expense account on the Profit and Loss report.

 

To start adding your inventory products, you can follow these steps:

 

  1. Turn on inventory tracking so you can add inventory items.
  2. Go to Sales, then Products and Services.
  3. Select New or Add a product or service. Then select Inventory.
  4. Add a NameSKU, or category for what you're tracking.
  5. Add your product’s Initial quantity on hand.
  6. Enter when you started tracking that quantity in the As of date field.
  7. Select the Inventory asset account ▼ drop-down and select Inventory Asset. QuickBooks uses this account to track the cost of all the products you have in stock (or inventory value).

To add your product’s sales, tax, and purchasing info:

  1. Add your product’s description on sales forms. 
  2. Select the Income account ▼ drop-down and find the account you use to track what you sell.
  3. Click the Sales tax category ▼ drop-down and specify how the item should be taxed. 
  4. Add your product’s description on purchase forms. 
  5. Add the product’s Cost
  6. From the Expense account ▼ drop-down, select Cost of Goods Sold. QuickBooks uses this account to track the cost of products you sell.
  7. Click Save and close.

I'm adding these related articles for additional information;

Feel free to leave a comment below if you have follow-up questions about tracking your purchases in QuickBooks. I'm always right here to help.

Level 1

Setting up a bar, Alcohol sales - how to put them against the alcohol asset

Hey Mary - first off thank you so far for your help. Am I able to have this just be a blanket item? For example, we dont really break down inventory and track it on an in/out basis. We track sales in our register system by product and such, but once it makes it to quickbooks, its just a number for sales, and a number from our various beer vendors. Can it just be one catch all on the way in and out as opposed to specific inventoried singular items?

QuickBooks Team

Setting up a bar, Alcohol sales - how to put them against the alcohol asset

 

Hi there, Andrew85Bar.

 

If you want QuickBooks to report as accurately as possible, I suggest using the available feature in QuickBooks Online when recording items that you buy and sell. This way, the report will show the correct information in your P&L and Asset accounts. That said, you're unable to have or leave the item as a blanket. You'll also have the option to create a Journal entry when you invoice or sold the product and purchase the items. That way, it generates an asset and expense. I'd also suggest consulting an accountant for further guidance to properly record this entry. This is to ensure your books are accurate in QuickBooks Online.

 

  1. Select + New.
  2. Choose Journal entry.
  3. Fill in the necessary fields to create your journal entry.
  4. Hit Save and new or Save and close.

 

For additional information, you can click this article: Create a journal entry in QuickBooks Online.

 

Please check this article to see steps on how you can change the income account for any of your product or service items in QuickBooks Online: Change the account for a product/service item.

 

Let me know if you have other questions or concerns. I'm determined to get this fixed for you. Thanks for coming to the Community, I'll be standing by for your response. Take care!

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