Hi there, @tejidocollective.
It's great having you here in the QuickBooks Community. How's your day going so far?
Along with what Fiat Lux - ASIA stated, in QuickBooks Online, Costs of Goods Sold (COGS) tracks all the costs associated with the items you sell, which allows you to calculate gross profits accurately. COGS accounts also give the total underlying costs on your Profit & Loss reports.
You'll need to assign inventory items to accounts that you create in the Chart of Accounts. This way, you can accurately track how much you've spent and earned and also keep track of what you have in stock.
Generally, COGS is affected only when you sell the items. This account isn't meant for the items you use to create your products, such as raw materials.
If the items you bought are used to run your business or part of your inventory cost, you can record them as expenses. However, for those you buy and resell, you can directly add them to your Products and Services List.
Here's how:
- Go to the Gear icon at the top, then pick Products and Services.
- In the Products and Services window, select New.
- Click the product or service type.
- Enter the new product or service information.
- Choose Save and close.
Below I've included some helpful articles that cover additional details about the COGS account.
However, please know that it's always best to consult with your accounting professional before making any changes to your account. Your accountant can advise the best way to record the data based on your business needs. If you don't have an accountant, don't sweat it. You can find one here in our Resoucre Center.
Let me know if you have any questions or concerns. I'm always around to lend a hand. Have a good one!
