Cost of goods sold issues in Profit and Loss Statement

Forum|Forum|7 years ago
October 16, 2018
28 replies
77 views

Hello , I manage a service station quick books is used as the method of choice for book keeping and tracking inventory . One of the issues I am having is with the Cost of goods sold section in my Profit & Loss sheet . When gas and diesel is purchased from the supplier should thos be showing as a debit or credit entry under the cost of goods sold section ? My second question is similar as i relates to purchasing snacks(i.e sodas, chips) for resale in the station should this be showing as a debit or credit ? Lastly, when the company actually sells the diesel and gas to various clients how should this be reflected under cost of goods sold ( debit entry i assume) ? Ultimately , it is believed the cost of goods sold is reflecting inaccurately because there is about a 10% difference between the figure and total sales .Thanking you in advance for your assistance.

QuickBooks Online

Best answer by Rustler

sales post to income - always

If you use QB inventory items, then when you purchase you do not use an expense account like COGS

you use the item details part of the purchase, and list each item, qty and total cost - that stocks inventory as an asset, and when sold moves the cost from inventory asset to COGS

if you do not see the item detail part of the purchase screen, in company settings>expenses>bills & expenses turn on the items table and purchase orders

If you are not using inventory items in QBO, let me know and I can explain periodic inventory

RustlerAnswer

Level 15

sales post to income - always

If you use QB inventory items, then when you purchase you do not use an expense account like COGS

you use the item details part of the purchase, and list each item, qty and total cost - that stocks inventory as an asset, and when sold moves the cost from inventory asset to COGS

if you do not see the item detail part of the purchase screen, in company settings>expenses>bills & expenses turn on the items table and purchase orders

If you are not using inventory items in QBO, let me know and I can explain periodic inventory

C

Carlaleeanne

Please help. I was on the phone with QB for over an hour and did not get my issue solved. I have just recently started tracking my inventory. I have all Product set up as "inventory item"like to "inventory asset" account "Income account is "Sales of Product Income" and the expense account is "Cost of Goods Sold". I have a an amount in the "Sale Price" and an amount in the "Cost". Yet when I run a P&L and look at the list of items in "Cost of Goods Sold" all of the items cost is 0.00. How do I get QB to track COGS? Thank you so much for your time.

HoneyLynn_G

Level 6

Hello there, @Carlaleeanne.

Thank you for joining this thread and providing some feedback. Allow me to step in and share some insights about tracking COGS in QuickBooks.

In order for the "Cost of Goods Sold" to show a non-zero amount, you have to make sure that you've entered a sales transaction with the item. Also, make sure to select the correct report period.

For in-depth information, please refer to this article: Understand Inventory Assets and COGS tracking.

Keep me posted if you have additional questions. Just add a comment below or mention my name.

Rustler

Level 15

On the P&L the number in COGS should be positive ( debit) the P&L does not show debits and credits unless you drill down

see the pic for how an inventory item should be set up

Sales is income, that is a credit to an income account, you do not post both sales and costs to one account if that is what you asking abount

L

lindak1119Author

Level 7

I use the items tab when I purchase my inventory . Initially I would create a purchase order for instance if I was to purchase 1000 gallons of diesel oil, then receive items and enter , and then pay the bill . In the bill I put in the item specifics under the item tab and under the expenses tab I account for VAT tax . Hypothetically, the total cost of the diesel is $2719.75 , where it is purchased at $2.64 per gallon and vat totals $79.75 .When I go into the cost of goods sold tab in my profit & loss this is being shown as a credit entry of $60.05 . When I go into other monthly reports some of the purchases in cost of goods sold is reflected on the credit side and some on the debit and all are understated . Something is wrong I don't know what .

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