Hi, I was gifted/ donated my starting stock and I am wondering how I would record this. The stock/inventory would be considered an asset right? Which account do I put it under if I didn't pay anything. I am going to be selling it. I want my quickbooks to show how much money I have worth in inventory in assets but I did buy it so don't know how to record. Thanks
Technically when a business is given something, the fair market value (FMV) of that something is booked as other income and then you spend it to buy that something.
But if you were given the stock personally, then book the amount as owner equity investment, and spend it to buy the inventory.
If the items are new to the business, just create the inventory item with a starting qty and cost, that will post to opening balance equity automatically, but you still need to assign the FMV as item cost
otherwise, create a vendor called inhouse
create the inventory items, zero qty and zero cost
create a cash type bank account called owners
"buy" each item from the inhouse vendor with qty and total cost for that qty
then make a deposit in the owners cash account for the total amount the cash account is showing as a negative and use owner equity investment as the source account for the deposit
- make a vendor under “in house”, - create a cash type bank account called owners -create all products in inventory with fmv amount, cost, & qty. - then creating a bill for the all the product, - pay the bill under cash type bank account called owners that was created -Then Transfer the amount that was paid for the bill, from owner equity investment account to the cash account called owner that was made/paid for bill with.