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Non inventory items cogs not showing up in pl report

We have some items that we've had on hand for a while and do have a cost associated with them but haven't been recently purchased (not in the system).  I've entered them as a non-inventory item as 'double sided' with a COGS and INCOME accounts.  When we invoice these to our customer, the P/L statement just sees the sale price and not the COGS.  If I change the item to "Inventory", the COGS shows up, but none of the Non-Inventory items COGS shows up.  Is there a work around for this?  Thanks

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Best answer 12-11-2018

Accepted Solutions
BRC
Established Community Backer ***

Cogs is only calculated in the way you're expecting for i...

Cogs is only calculated in the way you're expecting for inventory items.

For pass-thru non inventory items, the cost is recognized as you purchase the item, by including it on a purchase transaction such as a bill or check or credit card charge, depending on how you paid for the item.

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BRC
Established Community Backer ***

Cogs is only calculated in the way you're expecting for i...

Cogs is only calculated in the way you're expecting for inventory items.

For pass-thru non inventory items, the cost is recognized as you purchase the item, by including it on a purchase transaction such as a bill or check or credit card charge, depending on how you paid for the item.

Not applicable

Forgive me, please I don't have an accounting degree, and...

Forgive me, please I don't have an accounting degree, and am learning as I go.  Thank you for being willing to share your expertise, it is greatly appreicated.  I have an employee that purchased an item as a non inventory item.  I was afraid that we would not ever get to recognize the cost on this item, but by what you said we already have recognized the cost on it.  I was trying to find out how to change it to an Inventory Item (to recognize the cost) so I could sell it today.  Do I really need to change it to an Inventory Item, or is selling it as a Non Inventory Item okay since we have already recognized the cost.  I appreciate your time and effort to provide help.
BRC
Established Community Backer ***

There's no need to use inventory type items if you don't...

There's no need to use inventory type items if you don't want to track either those things as inventory or track anything as inventory.
Established Community Backer ***

If you look at the underlying journal entry of an invoice...

If you look at the underlying journal entry of an invoice, you will see that when you use an inventory item, there are 4 lines, while for non-inventory item there are only 2 lines (assume no sales tax or discount). The first 2 lines increases your sales and assets: debit cash or AR and credit Sales.  The extra 2 entries moves the cost from the balance sheet (Inventory asset) to the P&L (COGS)  debit COGS, credit Inventory asset.
Established Community Backer ***

"I have an employee that purchased an item as a non inven...

"I have an employee that purchased an item as a non inventory item.  I was afraid that we would not ever get to recognize the cost on this item, but by what you said we already have recognized the cost on it."

You paid the employee and you list that Item. You set up that item as Noninventory.

"I was trying to find out how to change it to an Inventory Item (to recognize the cost) so I could sell it today."

Don't change it to Inventory. This is not your Inventory; you told us you don't Stock it.

"Do I really need to change it to an Inventory Item, or is selling it as a Non Inventory Item okay since we have already recognized the cost.  I appreciate your time and effort to provide help."

Look at my attachment for a Two Sided Noninventory Item. Look at my previous attachments.

List the item on the Purchase and sell it. The Use of that item on Transactions will create the data flow per the accounts you assign.

You control this. Use Items. Open Help and read on Work With Items.


Community Contributor *

Thank you for explaining this, your answer was very easy...

Thank you for explaining this, your answer was very easy to follow.  I looked at my item and compared it to your attachments.  Mine worked just as you said it did.  Have a great day!
Community Contributor *

Re: If you look at the underlying journal entry of an invoice...

So, if the cost of this item is not being expensed when it is sold should the purchase invoice of this item be posted into cost of goods sold instead of inventory asset?

QuickBooks Team

Re: If you look at the underlying journal entry of an invoice...

Thank you for joining this thread, @JMorrow.

 

I can share some insights about the accounts in QuickBooks Desktop.

 

The COGS (Cost of Good Sold) account is used to track the cost associated with your business. This includes the cost of inventory, raw materials, freight charges and any labor cost that you incurred to finish the product. On the other hand, you'll use the Inventory asset when tracking the current value of your inventory.

 

For in-depth information, you can check the Understand QuickBooks Chart of Accounts article.

 

Meanwhile, you can assign an expense account to the item if you want to track the expenses. I'll show you how:

  1. On the top menu, click Lists.
  2. Choose Item List.
  3. Double-click the non-inventory item.
  4. Put a check mark on the This item is used in assemblies or is purchased for a specific customer:job box.
  5. Select an expense account on the Expense field.
  6. Click OK to save it.
    1.JPG

For additional reference, you can check this link: Add, edit, and delete items.

 

Please let me know how it goes or if you have any follow-up questions. I'll be here if you need further assistance. Have a good one.

Experienced Member

Re: Cogs is only calculated in the way you're expecting for i...

What account do I create to record the purchase of non-inventory items?

An expense account?

A COGS account?

 

Thank you.