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Cost of goods sold issues in Profit and Loss Statement

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.
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Best answer 10-15-2018

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Established Community Backer ***

sales post to income - always If you use QB inventory ite...

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


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Established Community Backer ***

sales post to income - always If you use QB inventory ite...

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


View solution in original post

Not applicable

Thank you . I do use the items part for purchases. So wh...

Thank you .

I do use the items part for purchases. So when I run my Profit & Loss report , and click into Cost of goods sold to see the details should these purchases i.e from the fuelements supplier be reflected on the debit or credit side under the cost of goods tab ? I want to ensure it is posting correctly .

As it relates to the sales , this is being reflected when  I go into the cost of goods sold tab too . The invoices and totals that were sold is showing and this is on the debit side , is this suppose to be posted ?

Thanks
Established Community Backer ***

On the P&L the number in COGS should be positive ( debit)...

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

Not applicable

I use the items tab when I purchase my inventory . Initia...

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 .
Established Community Backer ***

So you are using desktop - this thread says QBOnline You...

So you are using desktop - this thread says QBOnline
You are in Canada?  This thread says you are in the US
We do not have VAT so I am not sure how it works with inventory - in the US if we pay sales tax on an inventory item it is part of the item cost - check with the CRA and see if that concept is true too, since you are buying for resale
Not applicable

COGS amount not showing on P&L

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. 

QuickBooks Team

Re: COGS amount not showing on P&L

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.

Not applicable

Re: COGS amount not showing on P&L

I have the same issue. Update 4/12/19: figured this out. If you don't give a cost, any cost at all, when you create the Product or Service, it will not add in that Cost later. If you put in the cost when you CREATE the Product/Service, it will work as it should: create a COGS on your Income Statement as an Expense, and reduce the value of your inventory. Intuit could help a lot by putting a little help message on the screen when one is setting up a product or service, or a warning before you save a product / service that the Cost is $0 and that if one ever wants to track that one needs to enter the cost OR just letting one add in a cost later. 

Not applicable

Re: COGS amount not showing on P&L

Hello HoneyLynn, it would be helpful if you could explain what do to rather than referring us to an existing help article. I have been on phone with QB support for over an hour and they are telling me that it is not possible to show the $0. This makes no sense, since COGS and Inventory Value are showing up on the Transaction Detail of any given Invoice. Help would be greatly appreciated!!

Anonymous
Not applicable

Re: COGS amount not showing on P&L

Hello, @acgoggin.

 

I appreciate you reaching out to this thread to search for answers about the zero value for COGS. I'd be glad to help clarify the COGS and Inventory Value showing up on the Transaction Detail report.

 

When setting up an inventory item with no sales price and cost, it'll also show a zero amount on the Transaction Detail for Inventory Asset and COGS. So even if you try editing the cost and sales price, QuickBooks will still analyze it as zero COGS and Inventory Asset not unless the quantity for that item is zeroed out.

 

If you want to show the COGS on the report for this item, you'll need to adjust the quantity and recreate the inventory item. To know more about inventory adjustment, you can check out this article: How to adjust inventory quantity on hand.

 

I've attached some sample screenshots below about the differences between an item with and without cost and sales price. Also, how it would look like in the Transaction Detail By Account.

 

cogs1.PNG cogs2.PNG

 

This should help guide you in the right direction. If you need other helpful references, you can always visit our site: Help articles for QuickBooks Online.

 

Should you have other questions about COGS and Inventory, please don't hesitate to hit the Reply button. I'm always here to help.

 

Not applicable

Re: COGS amount not showing on P&L

Hi

 

I am also having the $0 COGS on my P & L. When I drill into the COGS detail some show cost but many do not. All our items are set up with a cost. We do not have a sell price established because sell price varies from customer to customer. We are just getting started wit QB Desktop 2019.

 

Pat

QuickBooks Team

Re: COGS amount not showing on P&L

I can provide how COGS works, Phanley71.

 

COGS will only get affected once you have sold inventory items using invoices or sales receipts. If you haven't added any sales transactions yet, it might be the reason why your COGS account shows as $0 in the Profit and Loss report.

 

One more thing, let's just make sure all items have cost since QuickBooks will calculate the COGS amount from it. Even though sales transactions are created but the item's cost is not set up, COGS will provide a $0 or incorrect amount. You can check this article for more information: Understand Inventory Assets and COGS tracking.

 

Let us know if you have other questions. We're just here. 

Not applicable

Re: COGS amount not showing on P&L

We have created invoices and sales receipts all month. The sales amounts show up on the P&L but most COGS do not. 

 

We started the year with QBO and it is a disaster for our business so March 1 we switched and transferred all our data to QB Premier 2019. Something happened in March with COGS in Premier because it was working in QBO. Why some costs transfer to the P&L and some do not is a mystery to us.

 

As I mentioned in my first post, all our inventory items have a cost assigned to them.

Anonymous
Not applicable

Re: COGS amount not showing on P&L

Thank you for the additional details you shared, @phanley71.

 

Let me chime in and help figure out why your COGS account is showing zero on your P&L. 

 

If you assigned a cost to all your inventory items in QBO, then transferred the data to QuickBooks Desktop, then this is a limitation issue. The COGs and Inventory Asset accounts will have incorrect balances due to different calculation methods used by QuickBooks Online and QuickBooks Desktop.

 

I'm including this article for more information: Export limitations - QuickBooks Online to QuickBooks Desktop.

 

I've also mentioned on the above thread about adjusting inventory quantity and recreating the inventory item. This will help show the COGS on your P&L report.

 

Should you have other questions about your COGS account, please don't hesitate to ask. I'm also here to provide help in any way I can.

Not applicable

Re: On the P&L the number in COGS should be positive ( debit)...

@Rustler Can you email me, I have a question regarding the expenses not showing on my profit and loss report. I've got my expenses coded as Cost of Goods Sold.

 

email me at [email address removed].

Experienced Member

Re: sales post to income - always If you use QB inventory ite...

Sorry to worry you...so if I am using the item part on the invoice.. The item on sales side goes to sales were must the item on the purchase side be allocate to what expense account.? Not COG ...

Moderator

Re: sales post to income - always If you use QB inventory ite...

Thanks for joining this conversation, Learner girl.

 

Yes, you're correct! When using an item on an invoice, the sales side goes to the sales account associated with it. For the purchase side, this will depend on how the item was set up. We can verify this by opening its information.

 

Here's how:

 

  1. In your QuickBooks Online (QBO), go to the Sales menu at the left pane to get to the Products and Services.
  2. Locate the item, then click Edit at the right under Action column. 506.PNG
  3. Scroll down to the Purchasing information section. From there, you can see the Expense account used for that item. 

507.PNG

For additional resources, consider checking out these articles for future reference:

 

 

Reach out to me if you have any other issues or concerns by leaving a comment. I want to make sure everything is taken care of for you. Have a wonderful day!

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