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I set up my inventory assets but where do I put the transaction from my bank account? In the Inventory account? (There is inventory assets and inventory)

I have two accounts in my QB account, Inventory and Inventory Assets. When I add my inventory it goes to the inventory assets account. Where do I put my purchase of inventory from my bank feed? In the inventory account? (Inventory Asset = Other Current Asset and Inventory = Other Current Asset so would this be a double recording of my inventory?)

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Best answer 10-19-2018

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Established Community Backer ***

IF, if you have QBO Plus, that has inventory items, you s...

IF, if you have QBO Plus, that has inventory items, you set them up and buy them, let me know if you have QBO+

other wise (simple start and essentials) you must use periodic inventory.  There are two ways to do periodic inventory, choose one and stick with it, you can not mix and match

1. (my preference) Create an asset account called purchases and post all purchases of item for resale to that account.  Periodically, weekly, monthly, etc value the inventory on hand, subtract that value from the amount shown in the purchases account and do a journal entry for the answer to the subtraction
debit COGS for that value
credit purchases for that value

OR

2.  Post all purchases to COGS.  Periodically, but at least at the end of the year, you value the inventory on hand and do a journal entry.
debit the asset purchases account for that value
credit COGS for that value

Print the P&L
then reverse the journal entry
debit COGS for that same value
credit the asset purchases account for that value

This last journal entry, moves the value of what was on hand at the end of year back to COGS so the cost will be counted against the new year sales.


3 Comments
Established Community Backer ***

IF, if you have QBO Plus, that has inventory items, you s...

IF, if you have QBO Plus, that has inventory items, you set them up and buy them, let me know if you have QBO+

other wise (simple start and essentials) you must use periodic inventory.  There are two ways to do periodic inventory, choose one and stick with it, you can not mix and match

1. (my preference) Create an asset account called purchases and post all purchases of item for resale to that account.  Periodically, weekly, monthly, etc value the inventory on hand, subtract that value from the amount shown in the purchases account and do a journal entry for the answer to the subtraction
debit COGS for that value
credit purchases for that value

OR

2.  Post all purchases to COGS.  Periodically, but at least at the end of the year, you value the inventory on hand and do a journal entry.
debit the asset purchases account for that value
credit COGS for that value

Print the P&L
then reverse the journal entry
debit COGS for that same value
credit the asset purchases account for that value

This last journal entry, moves the value of what was on hand at the end of year back to COGS so the cost will be counted against the new year sales.


Not applicable

I do have QBO plus.

I do have QBO plus.
Established Community Backer ***

@ h.quinn check your settings gear>settings>company sett...

@ h.quinn

check your settings

gear>settings>company settings
sales>products & services
and turn on qty tracking (inventory)
and
in company settings>expenses>bills & expenses turn on the items table and purchase orders. 

When you enter an expense or bill, about half way down the left side is a title "item Details" click that and a table opens where you can select the item, qty and item total cost for purchasing inventory

then see the pic for a new inventory item set up


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