The cost of inventory items that are billed at zero is sitting in our A/R account and I need to move it to an expense or COGS account. How can I do that?

I know  a way on how to remove the expense transactions from your Account Receivable (A/R) account, lori.mowen.

The option to move the billed inventory item to an expense or COGS account is unavailable. Once you create a billable expense transaction, it will be posted to your A/R account.

Since there are no charges on the expense because the items are for warranty purposes or gratis, you can go back to that transaction. Then, uncheck the Billable option and remove the billable item to that transaction. This take out the expenses from the A/R account without affecting the customer's account.

I have articles here to learn more about A/R, Inventory Assets and COGS and General Ledger:

• Accounts Receivable workflows in QuickBooks Desktop
• Understand Inventory Assets and COGS tracking
• How you can use general ledgers to guide your business

Keep me posted if you need anything else with managing your accounts in QuickBooks. I'm always here to help.

The only place that I'm aware of there being a billable option is on a vendor bill.  How do I do this on a customer bill?  

Hi there, @lori.mowen.

Great to have you back in the Community. I'm happy to assist with information on the cost of inventory items billed at zero. 

In this matter, I suggest making an inventory adjustment; this will correct your books and also will affect the COGS accounts. Follow these few simple steps, and you're on the way to success.

1.  Decide what kind of adjustment you need
2. Set up your inventory adjustment account
3.  Adjust your inventory
4. Make sure your inventory status is now correct

If further detail is required, view Adjust your inventory quantity or value in QuickBooks Desktop.

I'm just a click away if you have any further questions or concerns.