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Level 1

Non Inventory Account where to group in Chart of Account for double effect ?

Hello

 

I am looking record a non-inventory item but after the entry or recording its not appearing both the places where it supposed to be i.e. one effect at B-Sheet and another in Profit & Loss A/c.

What is it need to be done to do so ?

For ex: Last year's opening balance is $ 25,000 when i am using non-inventory account its only appearing in balance sheet but not in P&L.

Thanks

 

4 Comments
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Level 9

Non Inventory Account where to group in Chart of Account for double effect ?

When you say, Non-Inventory Account, are you referring to setting up a Non-Inventory Products/Services? Inventory is tracked as an Asset on your Balance Sheet. The cost of the inventory items are not recorded until they are sold. Non-Inventory Items are tracked as a current cost (Cost of Goods Sold) and they are recorded on your Profit & Loss statement when they are purchased. You will only see the cost of your Non-Inventory items on your Profit & Loss statement after the items associated with them have been sold.

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Level 1

Non Inventory Account where to group in Chart of Account for double effect ?

Hi I am having a similar problem, however when I sell a non inventory item or a service, the cost are not charge on the Journal Report. Do you know how can I fix that?

 

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Level 15

Non Inventory Account where to group in Chart of Account for double effect ?

The sale of an Inventory Item results in Three Lines:

Asset (inventory goes Down by the Cost Basis on hand

COGS goes Up by that same amount

Sales is seen for the Gross sale.

That would be three $1 lines in the attached image. They are not bracketed properly for what actually happened.

 

Then, Noninventory is never carrying a Cost in the sales transaction. That is only the Sales amount. The Cost amount is from any Purchase you entered where you used that same Two Sided item, so that you can relate that same Noninventory item from its own purchase (and Job Tracked to that customer, if that was a direct and specific purchase just for their sale) and then the Sale of it gives the income and the ability to see Profit for that Service, Noninventory or Other Charge type of activity. The profitability of the inventory item on sale is revealed in the sale journal. The others are Not seen here; they are only showing Sales Revenue as the gross.

 

And this only works if you are using a QB program that allows you to make the Service, Noninventory and Other Charges as Two Sided and you specifically show you both Buy and Sell this, so that there is the Expense account link and the Income (or reimbursement income) account link = Two Sides.

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Level 10

Non Inventory Account where to group in Chart of Account for double effect ?

That's not a problem. That's how the non-inventory item or service items suppose to work in QuickBooks. In QBO, only the "inventory asset account" (as a default Inventory Detail Type) will also show cost on a Transaction Journal report when creating a sales form. Usually, for all non-inventory or service items, you will record as COGS type or expense account. Even if you set up as "other current assets account type" on the Balance Sheet for these items, it will do nothing when you create a sales form. If you want to match cost with revenue, you will need to somehow reclassify to COGS from the other current asset account (if it's set up that way).

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