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208Accountant
Level 1

COGS posting to A/R on invoices with inventory parts under cash basis

Trying to resolve Accounts Receivable on Cash Basis Balance Sheet. After my investigating, I realized that the average COGS is debiting A/R and crediting Inventory Asset on invoices with inventory parts, on the cash basis reports. The Transaction Journal reflects the postings under the accrual basis with the COGS being debited and Inventory Asset credited, like I would expect, but can anyone tell me why COGS would go to AR under the cash basis and point me in the direction of a resolution? I have already looked at the resolutions at the link below and did not find a solution, even though the problem is clearly stated in the article. 

 https://quickbooks.intuit.com/learn-support/en-us/balance-sheet/resolve-ar-and-ap-balances-on-the-ca...

Solved
Best answer August 12, 2020

Best Answers
AileneA
QuickBooks Team

COGS posting to A/R on invoices with inventory parts under cash basis

Hello, 208Accountant. 

 

Thank you for reaching out to the Community. I'm here to help and provide you additional information about the balance sheet and COGS in QuickBooks Desktop. QuickBooks doesn't show any inventory on hand for a cash basis balance sheet, it is all-expense when paid for. 

 

For example, If you buy inventory on credit, then AP should show on the balance sheet even though it's cash basis because inventory is an asset. It's just because a cash basis doesn't always mean there is no AR or AP.  

 

For additional information, you can refer to this article: Understand inventory assets and cost of goods sold tracking.  

 

Please check these articles to see steps on how you can track your inventory, and how inventory tracking has specific impacts on your Balance Sheet: 

 

 

I'd be happy to provide additional assistance if you still need help with COGS. Just hit the Reply button below for me to notify. Have a good day and Take care!

View solution in original post

2 Comments
AileneA
QuickBooks Team

COGS posting to A/R on invoices with inventory parts under cash basis

Hello, 208Accountant. 

 

Thank you for reaching out to the Community. I'm here to help and provide you additional information about the balance sheet and COGS in QuickBooks Desktop. QuickBooks doesn't show any inventory on hand for a cash basis balance sheet, it is all-expense when paid for. 

 

For example, If you buy inventory on credit, then AP should show on the balance sheet even though it's cash basis because inventory is an asset. It's just because a cash basis doesn't always mean there is no AR or AP.  

 

For additional information, you can refer to this article: Understand inventory assets and cost of goods sold tracking.  

 

Please check these articles to see steps on how you can track your inventory, and how inventory tracking has specific impacts on your Balance Sheet: 

 

 

I'd be happy to provide additional assistance if you still need help with COGS. Just hit the Reply button below for me to notify. Have a good day and Take care!

View solution in original post

208Accountant
Level 1

COGS posting to A/R on invoices with inventory parts under cash basis

I have learned something new! Thank you!

 

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