Why do amounts for materials and labor found on invoices created in quickbooks online transfer to the P & L as a negative amount? CGS section has negative balance

Hello there, @john167. 

Thanks for posting your question here. Allow me to step in and share some insights about tracking the Cost of Goods Sold (COGS) in QuickBooks. 

It will show a positive amount in your Profit and Loss report. Selling the items will credit the COGS. It will offset or cause a negative amount in the report. 

You can view the Transaction Journal of your invoices or bills to verify that COGS is displaying the correct amounts in your Profit and Loss report, and here's how: 

1. Open an invoice or bill. 
2. Click More at the bottom of the Invoice or Bill window. 
3. Pick Transaction journal. 

It's also best to reach out to an accountant about this. They'll be able to provide you with more options in reviewing your reports. 

If you have any more questions or concerns, please don't hesitate to comment below. Have a safe and productive weekend ahead!

Kendra - 

Why would COGS be negative. Cost-of-Goods-Sold is the cost of the goods sold, so can't be negative.

Welcome to the Community, @Teri.

Allow me to chime in for a moment and provide clarifications about the Cost of Goods Sold (COGS) account in QuickBooks Online.

When you run the Profit & Loss report, it shows your inventory-enabled product and services under the COGS account. I agree with you that it should show positive numbers once you set it up correctly.

If the transactions in question are using inventory items, I suggest reviewing the accounts (asset, income, and expense) and ensure they are correctly selected from the item information. Also, you can click the negative figures on the report to drill down and expand the transactions causing the issue.

Viewing the data will help you determine the cause of the problem. You can refer to the attached screenshot on how you can expand a transaction report:

I've also included some articles in case you need more ideas about how inventory works in the system, as well as some helpful reports:

• Learn common accounting terms

• Set up and track your inventory in QuickBooks Online

• Use reports to see your sales and inventory status.

Please know that the Community has your back if you need assistance. It’s a place for you to connect with experts and peers. Wishing you and your business continued success.

Hi Kendra at Intuit -

I am not the person who posted question here.  I am questioning your response to that person including the example you shared with negative COGS, which is clearly incorrect since cost does to ADD to revenue, s/b subtracted from revenue to get net profit or loss.  So your example is incorrect and he already has incorrect.

Further, why on earth would you share an example with a complication like Unapplied Income account? Not even sure why that would exist since you either record revenue or you don't, so why would there be some entry that presumably reduces revenue and makes the whole thing worse wrong than he probably has now?

@john167 - I suspect you have selected a preference perhaps unknowingly, that is unique to QB and totally weird to me, where what they call "reimbursed expenses" actually post credits to expense accounts.

Hi there,

I am also having a hard time trying to figure out how to "clear" a negative balance to my Job Materials Sold, as it's posting a credit of sorts to my COGS.  We have Desktop 2020 Pro and when I run a P&L and drill down on my Job Materials purchased, the amounts from invoices are posted as negatives to Accounts Receivable, and even when those invoices are paid in full, still show as negatives. The Accounts Receivable doesn't clear, so it looks like we are owed money, when we are not. Its deceiving. I am not sure if this is operator error or a QB fluke?  Any help and suggestions welcome.   Thank you!

Hi there, Carissaochoa.

Welcome to QuickBooks Community. I appreciate you providing detailed information about your concern. I'll be sharing troubleshooting instructions to ensure that the amounts from invoices are accurate to Accounts Receivable or on the Profit and Loss report.

Since invoices are paid in full, they should appear as a balance on the report and not a negative one. I suggest running the  Verify and Rebuild Data Utilities to get this sorted out. The Verify Data utility identifies any potential data damage issues that might've caused unusual behavior of your data on a report. While the Rebuild Data utility repairs damaged data in your company file. Before this, you'll have to secure a backup copy of your company file.

To Verify data:

1. Go to the File menu.
2. Scroll down to Utilities.
3. Select Verify Data.
4. Click OK.

To Rebuild Data:

1. Go back to the File menu.
2. Choose Utilities.
3. Select Rebuild Data.
4. Click on OK when you get the message Rebuild has completed.

For further details, you can refer to this article: Verify and Rebuild Data in QuickBooks Desktop.

Lastly, you may refer to this article to see steps on how you can save QuickBooks reports so you can use them in Microsoft Excel: Export reports as Excel workbooks in QuickBooks Desktop.

Let me know if you have other questions about the details mentioned above or within your account receivable entries. I'm always free to help you whenever you need my assistance, Carissaochoa. Take care and stay safe always!