Creating Inventory Items: Income Account question

10 replies
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I'm a new user. I'm slightly confused. When creating an "Item," under the drop down of "income account," should I use "proceeds from sale of assets" or "inventory asset"? I was watching a tutorial and I saw that they used "inventory asset" for the income account. To me, it doesn't make sense since it's asking for and income account. So confused. What should I use?

QuickBooks Desktop

RustlerAnswer

Level 15

Inventory and assembly items have three accounts
expense = COGS
income = your sales income account
asset = inventory asset

any video or advice you received showing an asset account selected in the income account selection is wrong.

The inventory help files and video tutorials are helpful. QuickBooks for Dummies, and Business Accounting for Dummies are great books. There is also a lot of information on my blog, and several "How 2" articles on the basics. QB is an accounting program and has a steep learning curve regardless of what the PR says.

In preferences>Items & Inventory>Company tab check mark that inventory & purchase orders are active, when you create the first inventory item, QB will create the inventory asset and COGS accounts, and then go for it in a test file first.

Inventory if mis-entered or mismanaged can be the worst thing to try to correct that there is in QB.

Graceman

Its an Income type account normally called sales as its what you sell, You can name it what you want but normally sales goes to sales but there is no reason why you cannot break it down like "Inventory sales" or "capital equipment sales or "resale sales" etc etc.
However there are also reports that you can use to break down sales if required using other methods.
But its what you want tthat matters and no one knows your business like yourself.

L

lindak1119Author

Level 7

Thank Graceman

RustlerAnswer

Level 15

Inventory and assembly items have three accounts
expense = COGS
income = your sales income account
asset = inventory asset

any video or advice you received showing an asset account selected in the income account selection is wrong.

The inventory help files and video tutorials are helpful. QuickBooks for Dummies, and Business Accounting for Dummies are great books. There is also a lot of information on my blog, and several "How 2" articles on the basics. QB is an accounting program and has a steep learning curve regardless of what the PR says.

In preferences>Items & Inventory>Company tab check mark that inventory & purchase orders are active, when you create the first inventory item, QB will create the inventory asset and COGS accounts, and then go for it in a test file first.

Inventory if mis-entered or mismanaged can be the worst thing to try to correct that there is in QB.

L

lindak1119Author

Level 7

Thank you Rustler. Much appreciated. You make it sound so easy. Funny thing was I saw the video on this site. Anyway, you were a lot of help.

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