Will quickbooks desktop track inventory?

@ rh
Your approach works in manual accounting using journal entries, but it does not work in QB if you use inventory items.

@ President

Do not create a balance sheet account called inventory - QB did that for you and it is a special type of account that QB likes to use. Do not set up a second inventory account, there is no reason to, and it usually leads to problems and issues later on.

You do not, ever, use a journal entry for inventory or inventory items - never.  And you never use inventory asset in a transaction of any kind either.

Gaap is not a required standard unless you are listed on the market and subject to the SEC regulations, and the IRS does not accept all of the so called gaap standards.

There is no required inventory valuation or tracking method, periodic and perpetual are both fine and accepted

This is a wasted explanation since you marked this as using pro - pro does not have the assembly item.  Premier does, but.

In QB an assembly item is a finite relationship.  a number of different things make one of something, each and every time, no waste no variable outputs.  If you can say that a measured amount of each ingredient always makes exactly 100 crackers with no waste, and no broken ones, then you might be able to use an assembly item - but I would not.

If you choose to do so (which means buying premier), keep in mind that an assembly item makes one of something. so if you use 10# of flour to make 100, you need to stock the flour in ounces and calculate how many ounces it takes to make one cracker.  Doing the same for every ingredient.  And it gets worse, you can use a decimal amount that does not add to one or inventory goes way off.  decimals like 0.125, 0.5 are fine, but a decimal of 0.33 or 0.85 is not.  Then in build assemblies you build 100 of the cracker assembly.

You can use a work around, but it is a pain
Buy and stock your inventory items, no you do not stock water that is a utility you pay for and is expensed already.
create a bank type account called work in progress (WIP)
use inventory adjust, set the adjusting account to the WIP bank account and lower the qty of the item you will use - that moves the cost of the items to the wip bank.
Make your crackers in real life, when you know how many you have that can be sold
use write checks on the WIP bank account, do not print the check it is just used for data entry, select any vendor or create a dummy for this purpose, list your cracker item, enter the qty you actually made, and in the total item cost block enter the full amount in the wip account, save.  The stocks the inventory item cracker with qty and cost per each.  You use that item on a sales receipt or invoice to sell it

when you do that, QB makes the required entries for income AND COGS - you do not have to make double sided items.