Once you set up an inventory item (the same goes with the items in a bundle), the program automatically adds two accounts to your Chart of Accounts namely Inventory Asset (Other Current Asset) and Cost of Goods Sold (COGS).
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.
Visit these easy-to-access articles, webinars, and video tutorials that will help you in familiarizing the different tasks, features, and functions of QBO.