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Level 1

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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Level 15

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)

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.


View solution in original post

9 Comments
Highlighted
Level 15

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)

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.


View solution in original post

Highlighted
Level 1

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 do have QBO plus.
Highlighted
Level 15

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)

@ 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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Level 1

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)

Hi,

 

I am just starting my busines, so I am using QBO simple start, but plan on moving to QBO Plus as my business does become more profitable.

 

I was wondering if I could use Inventory Assets instead of creating an asset account called Purchases, and at the end of the month I would

 

debit COGS for the cost that I pay for the products
credit Inventory Assets for that value.

 

Also, I have Inbound shipping expenses and tarifs.  Should I include those as part of Inventory Assets?

 

Thanks,

 

Rob

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Level 1

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 the same question. I have QBO Plus. When I enter the product items in expense I would like to use other expense account however it gives me an error asking me to use another account. I’m using another account when I buy my inventory and use a debit card. How do I do this? Thanks

Highlighted
QuickBooks Team

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)

Hi Jshoplist,

 

I'll help you check to see why you're prompted to use another account when creating an expense transaction.

 

In an expense transaction, you can use a bank, credit card, a debit account in the Payment account field. In the Category table, you can select any expense account as well. In the Item details table, you can add an inventory item. Also, you can use both an expense account and an inventory item in an expense transaction at the same time.

 

You can try adding another expense account to see how it goes. If you can save the transaction without an error, you can check the details of the other expense account that you tried to add.

 

It would be best if you can send a screenshot of the transaction, the details of the account and the items that you want to use.

 

Thank you in advance.

Highlighted
Level 1

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)

Please see attached. My main currency is not USD however for this transaction it is in USD. The balance you see was entered via Journal Entry. Thanks.

 

ss1.PNG ss2.PNG

Highlighted
QuickBooks Team

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)

Oh! Thanks for the screenshot, Jshoplist.

 

I can see that your Payment account is an Other current assets account. That's the reason why you're prompted with the error. In that field, you'll want to select a credit card, a petty cash account or a bank account to save the expense.

 

If you want to use the funds from the Other current asset account, you can move it to a petty cash or a bank account first. The movement can be achieved via journal entry, but please have it verified your accountant to make sure your records are accurate. After moving, use the petty cash or bank account in the expense transaction. 

 

If there's anything that I cab help you with your expense transaction, please let me know.

Highlighted
Level 1

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)

Great! Thank you

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