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One reason for the negative balance in Cost of Goods Sold (COGS) is misclassified transactions where sales transactions are mistakenly recorded as COGS rather than classified under an income account. I’m here to guide you on how to adjust billing items to credit the correct income accounts, Natalie.
You can review your products and services list. Look for the items incorrectly linked to COGS and ensure the Income Account drop-down for each item is set to the correct income account. Here's how:
- Go to the Gear icon, and select Products and services.
- Under the Action column of the appropriate item, select Edit.
- From the Income Account drop-down, choose the correct account.
- Click Save and close.
To help you understand how QuickBooks handles inventory assets, average cost and Cost of Goods Sold (COGS), see this article for reference: Understand Inventory Assets and Cost of Goods Sold Tracking.
Furthermore, QuickBooks Online (QBO) offers various financial reports that will help you cater to your business needs. To learn what these reports are available for your plan, check this out: Reports Included in your QuickBooks Online Subscription.
Did you know that our QuickBooks Live Expert team is readily available to assist you in maximizing the benefits when assigning accounts? With their expertise, you can gain a clearer understanding of your business's financial health and make more informed decisions.
Post your reply below. I'll always be right here if you have any other questions or concerns about COGS or your product and service items.
