Hello there!
In QuickBooks Online, “Inventory” is an asset account that tracks the current value of items you still have on hand, while “Inventory Purchases” (or “Cost of Goods Sold – Inventory Purchases”) is an expense account used only in systems where inventory isn’t tracked on a perpetual basis.
If you’re using the Products and Services list with “Inventory” item types, QuickBooks automatically posts:
- The purchase to Inventory (asset), and
- The sale to Cost of Goods Sold (COGS) and Income when the item is sold.
That means your “Inventory” purchases should not be directly categorized to an expense account like “Inventory Purchases.” Doing so would bypass the balance sheet and prevent QuickBooks from tracking quantities or adjusting COGS correctly.
In your case:
Because you’re buying trading cards to resell, you’ll want to use Inventory Items (not “non-inventory” or “expense” categories). Each time you buy cards, record them with the Inventory Item you created — this increases your Inventory asset balance. When you sell them, QuickBooks automatically relieves Inventory and records the matching COGS expense.
If you’ve been categorizing past purchases directly to “Inventory Purchases,” you should correct this.
–– Regina Pitts – Advanced Certified QuickBooks Online ProAdvisor
