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the problem is your starting value being posted to a liability account
the loan should have been entered and off set to a cash type bank account
then you "buy" the inventory items using the cash type bank account
if you do it that way COGS will be right both cash and accrual basis
Journal entries should be the exception when using QB, they often do not work as you think they should, and when you use inventory type items they never work for inventory. It is much better to use the forms on the home page the way QB is designed to be used. Journal entries also bypass accrual/cash reporting, and will not show on many reports.
Another way to get it done, would have been to create the loan account with a starting balance, that would have posted to opening balance equity
then create each inventory item with qty and cost, that also posts to opening balance equity offsetting the loan amount.
You use the Buy/Sell info. Like this:
Assets = Liab + Equity
So, Inventory and other assets are entered, offset to Equity
Then, Debt is entered, offset to Equity
And now Equity shows the Net. That's why a synonym for Equity is "Net Assets."
the problem is your starting value being posted to a liability account
the loan should have been entered and off set to a cash type bank account
then you "buy" the inventory items using the cash type bank account
if you do it that way COGS will be right both cash and accrual basis
Journal entries should be the exception when using QB, they often do not work as you think they should, and when you use inventory type items they never work for inventory. It is much better to use the forms on the home page the way QB is designed to be used. Journal entries also bypass accrual/cash reporting, and will not show on many reports.
Another way to get it done, would have been to create the loan account with a starting balance, that would have posted to opening balance equity
then create each inventory item with qty and cost, that also posts to opening balance equity offsetting the loan amount.
@SignEnhancers wrote:
In entering inventory starting values I assigned them to the long-term liability acct
How did you do that? If you enter Qty and Cost in the new item set up screen, the offset goes to Opening Balance Equity, which can't be changed
Never mind; I see it can be changed (but should not be)
You use the Buy/Sell info. Like this:
Assets = Liab + Equity
So, Inventory and other assets are entered, offset to Equity
Then, Debt is entered, offset to Equity
And now Equity shows the Net. That's why a synonym for Equity is "Net Assets."
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