Question

COGS on Profit and Loss Statement

Forum|Forum|7 years ago
January 4, 2019
4 replies
16 views

The COGS on my Profit and Loss Statement is not running correctly. It includes BOTH lines corresponding to each sale (as it should) AS WELL AS lines corresponding to each purchase from our vendor (which it shouldn't). Have I checked a wrong box somewhere?

Example

01/07/2018 Invoice 17-101 Customer Product A Accounts Receivable 300.00
01/23/2018 Bill 2935 Vendor Product A Accounts Payable 300.00

Thanks!

QuickBooks Online

J

JamesDuanT

QuickBooks Team

The Cost of Goods Sold (COGS) account is used for purchasing and selling items, vlphall.

Purchasing Product A will debit COGS, thus showing a positive amount in your Profit and Loss report.

Selling the said item will credit COGS. It will offset or cause negative amount in the report.

You can view the Transaction Journal of your invoices or bills to verify that COGS is displaying the correct amounts in your Profit and Loss report.

Open an invoice or bill.
Click More at the bottom of the Invoice or Bill window.
Select Transaction journal.

It's also best to reach out to your accountant about this. They'll be able to provide you more options in reviewing your reports.

Let us know if you have further concerns.

Rustler

Level 15

@JamesDuanT wrote:

The Cost of Goods Sold (COGS) account is used for purchasing and selling items, vlphall.

Purchasing Product A will debit COGS, thus showing a positive amount in your Profit and Loss report.

Selling the said item will credit COGS. It will offset or cause negative amount in the report.

So wrong, especially if the OP is using inventory type items

Rustler

Level 15

@vlphall wrote:

The COGS on my Profit and Loss Statement is not running correctly. It includes BOTH lines corresponding to each sale (as it should) AS WELL AS lines corresponding to each purchase from our vendor (which it shouldn't). Have I checked a wrong box somewhere?

Example

01/07/2018 Invoice 17-101 Customer Product A Accounts Receivable 300.00
01/23/2018 Bill 2935 Vendor Product A Accounts Payable 300.00

Thanks!

Are you using inventory type items for product A?

Your example is not complete in terms of the accounting.

you purchase the item and the accounting entry is to increase A/P, and increase either the inventory asset or an expense.

A sale of inventory means several things happen, not just an increase to a/r

M

Malcolm Ziman

Level 4

@vlphall wrote:

It includes BOTH lines corresponding to each sale (as it should) AS WELL AS lines corresponding to each purchase from our vendor (which it shouldn't)

Not sure what you are saying but 4 accounts are impacted with every sale of an inventory item:

- credit income (increase)

- debit AR or bank (increase)

- credit inventory asset (decrease)

- debit COGS expense )increase)

If you click on More>Transaction Journal at the bottom of a sale form, you will see this

M

Monika1983

Hi guys,

I'm getting back to this issue, as I suppose I have the same problem. When I issue a report "Sales by Product/Service Summary Report", I see different amount in COGS field then when I issue P&L for the same time period. I went through one exemplary item and found out, that Cost of Goods Sold Account includes also purchases of this item (But not all of them) and the amount of the purchases is matching the difference. I can see that the item is on COGS account in Transaction journal of Sales invoice and also Purchase invoice (Bill) - Both on Debit side (But again - Not valid for every purchase invoice).

Setting of the item is following:

Inventory asset account = Inventory Asset

Income account = Product Sales

Expense account = Cost of Goods Sold

Can you, please, help me?

Thank you!

Monika

AlcaeusF

Level 14

Hello Monika1983,

Welcome to the Community. Allow me to help figure out the transaction journal result of the purchase invoice in QuickBooks Online.

Can you share with me which specific report shows the COGS amount and includes the purchases? Any additional information you can add will ensure a timely solution.

Your bills will reflect on your COGS account once you add it as a category on a transaction. Since the item setting is correct, I suggest you go to your Chart of Accounts and review the purchase invoices showing on the report.

Here's how:

Click the Gear icon in the upper-right corner.
Below Your Company, select Chart of Accounts.
Search for the Cost of Goods Sold account.
Below the Action column, click the Run report option.
Click to open the bill.
Review the details.

Please check out the sample screenshots below:

If you want to know more about the source and targets for running reports, check out the article I found helpful on this:

Targets vs. Sources overview.

Please don't hesitate to add more information or screenshots if you need further help with the reports. I'm always up to lend a hand.

M

Monika1983

Dear AlcaeusF,

Thank you for your reply!

The problem is the Bill is showing on our CGOS account (When I open the report via P&L or Chart of accounts) even if it contains Inventory items. The weird thing is, that we have only few suppliers of our products and most of the Bills from them are OK (Booked correctly as Inventory Asset). Only some of them are directly on COGS account.

Ad.: We're not using COGS for direct booking of the expenses.

Also we moved from QB Desktop to QB Online, what can cause some problems:
1. This conversion could somehow cause this problem.

2. I'm not able to change any of the invoice before the date of conversion (07/08/2019).

Please, see the Screenshot enclosed, where you can see the details of the Bill (Items) and on the right side the transaction journal of the same Bill, and you can see, that it's booked to COGS instead of Inventory asset.

Thank you!

Monika

Sign up

Login with SSO

Let's get you signed in

Login with SSO