Why are my bills for inventory posting to COGS instead of Accounts Payable

Welcome to QuickBooks, annie0216.

Ideally, inventory COGS is only affected when you sell inventory items on invoices or sales receipts. You'll want to adjust the inventory Asset account and the COGS account. Let me provide you information about this.

Also, once you sell an inventory item, you can run the Transaction Journal Report for the invoice/sales receipt and you see the Sales/Accounts Receivable transaction and the  Inventory/COGS transactions which credit the Inventory Asset account and debit the COGS accounts.

Please check this article for more information: Understanding Inventory Assets And Cost of Goods Sold Tracking.

For future reference, please check these articles for more information: Inventory.

Please get back to us if you need anything else. I'll be here to help.

I understand that and I will make the adjustment, I never set it up to debit COGS, how can I change the account so it affects accounts payable

Good day, annie0216.

I'm joining this thread so I can share more details about bill.

The bill of an inventory item will automatically post to the Accounts Payable and an Asset account (Inventory Asset). We're unable to change the A/P here. Let's check if you renamed your A/P as COGS.

We can check your accounts so we can verify it.

1. Go to the Lists menu and select Chart of Accounts.
2. Find the COGS and check its Type.
3. Make any changes if needed by right-clicking on the account and select Edit Account.

You'll want to check the Accounts Payable workflows in QuickBooks Desktop for more details.

I'll be here if you need anything else. Wishing you all the best!

I have checked and the account says COGS, see the pic attached

If I go to accounts payable ledger, I see the total amount for the bill, why is it showing up in my COGS?

Thanks for the additional info, @annie0216.

It seems like you're referring to the cost of sales in the Debit column of your Cost of Goods Sold (COGS).

I have a few steps for you to check your transaction journal related to your bill and invoice/sales receipt. This way, we can track each transaction entry based on your General Ledger. 

First, let's check the double-entry of your bill.

1. Go to Vendors and select Vendors Center.
2. Select the vendor's name.
3. Right-click the bill and choose the View Transaction Journal option.

It affects two accounts: Accounts Payable and Inventory Asset.

Then, let's view the transaction journal of your invoice/sales receipt. You have the option to open the transaction directly from your General Ledger (GL) report. I'll guide you how.

1. Go to Reports.
2. Select Accountant & Taxes and choose General Ledger.
3. Double-click the sales transaction from the COGS section.
4. Select the Reports tab.
5. Choose Transaction Journal.

A sales journal entry debits the Accounts Receivable account and credits revenue account (COGS) for the sales price. Also, it debits COGS for the cost the company paid for the inventory and credits the inventory account for the same cost. That's most probably the reason why you're seeing the total amount of the bill in the COGS from the GL report.

I'd still recommend consulting your accountant for more guidance and advice.

To give you a better idea about tracking the inventory assets and COGS accounts, check this article: Understand inventory assets and cost of goods sold tracking.

Please let me know if you have additional questions or concerns. I'm always around to help.

See attached picture, this is what I mean, why are some of the items hitting COGS?

Thank you for providing us with a screenshot, @annie0216. 

When you purchase an inventory item, your bill, check or credit card charge will debit the Item's Inventory Asset account and credit Accounts Payable, bank or credit card account. 

It'll also be best to reach an accountant to know more about these accounts. 

if these items aren't posting correctly, then I suggest reaching out to our Customer Support directly. They have the additional tools that can further check your account in a secure environment and verify what causes this error and help you resolve it. 

You can arrange a callback to talk to them. Here's the contact the QuickBooks Desktop Customer Support Team article for more information. 

Let me know if there's anything that I can help. I'm always here to assist. Have a wonderful day!

I checked all that yesterday and provided pictures of my journal and my type.  COGS is set to COGS.  I also uploaded a pic of the transaction journal for the bill which shows inventory asset and COGS.  I need to fix this because my COGS are overstated.  I am trying to understand how Quickbooks posts the bill and the item receipt when a receiving is posted and when a bill is posted

Thanks for getting back to us, @annie0216.

Let me provide additional information about inventory assets and COGS showing in your bill transaction.

A bill or payment for inventory items is what stocks the item with quantity and cost. Thus, selling the items will reduce the quantity and the cost will post to COGS. The posting of bills to COGS means that you sold items when you did not have it, and the quantity on hand went negative. 

Please know that you can never post anything to inventory assets when you use inventory items. Thus, this will mess up your inventory asset account on the balance sheet. 

However, if you need further assistance with your concern about COGS and inventory asset posting to the bill, I recommend contacting our Phone Support Team. This way, they can provide you additional information about the posting of the bill.

Keep in touch if you need any more assistance with this, or there's something else I can do for you. I've got your back. Have a good day and keep safe.