Skip to main content

SUMMER SAVINGS 90% OFF QuickBooks for 3 months* Ends 8/27

Buy now
Switch to QuickBooks and 70% off for 3 Months
Talk to Sales: 877-683-3280
Hours
Mon - Fri, 5am - 6pm PST
Sat - Sun, 7am - 4pm PST
Product support & help
Need help signing in?
B
BillM
January 17, 2022
Question

Accounting for Gallery owned artwork

  • January 17, 2022
  • 2 replies
  • 4 views

We are a small art gallery.  At least 95% of the art in the gallery is on consignment.  I have no problems keeping the books for the consigned work and the payments due to the artists.  Occasionally, we will work with an artist who tells us they don't do consignment but they will sell us the work at a "wholesale" price.  This is where I am struggling. 

How do I account for the purchase of the artwork (Expense Account? or Inventory Asset like Gallery Owned Art?) and then how do I deal with the income after the item is sold?  Does this involve COGS?  I may just be overthinking it. 

Thanks for any help.

2 replies

S
ShiellaGraceA
Level 9
January 17, 2022

Welcome to Community, @BillM.

 

I'll share some information about categorizing arts. You'll use the expense account for the indirect costs of your business. While you'll use the COGS account for direct expenses related to what you sell (raw materials). If you have doubts about the accounts to use, I recommend consulting your accountant.

 

If you don't have an account, check out this site: Find a ProAdvisor.

 

In the meantime, here's how to create an account in QuickBooks Online.

 

  1. Go to Accounting.
  2. Choose Chart of Accounts.
  3. Select New.
  4. In the Account window, enter the account info.
  5. Click Save and Close.

 

 

 

 

I've also added these handy articles below for additional reference. It has details on how to handle COGS account.

 

 

Please click the Reply button below if you still have questions or concerns with expense accounts. I'll be around for you. Have a great day ahead.

B
BillMAuthor
January 17, 2022

Thanks for your reply.  I'm sorry but I don't really understand what you are saying.

 

Your reply said "You'll use the expense account for the indirect costs of your business. While you'll use the COGS account for direct expenses related to what you sell (raw materials)."

 

If I buy a finished painting for $100 and subsequently sell it for $200 it sounds like you are saying I should use an expense account to record the $100 purchase and an income account to record the $200 sale.  What if I can't sell the painting right away?  How does the value of that painting appear on the books? (Is a finished painting considered Raw Materials? Is it really an "Indirect Cost"?

 

Thanks for your patience.

 

Need QuickBooks guidance?
Log in to access expert advice and community support instantly.
Terms & ConditionsAccessibility statement