Steve,
Thank you. I also think that is a perfectly good way to do it. I do
understand Cost of Goods Sold (and I think it should be contra the
related sales / revenue (income) account.
That's the way I'll do it.
Thanks so much!
Eric
On 12/20/22 11:25, Stephen M. Butler wrote:
Eric,
As you noted, they are an Asset. Now, I'm not a CPA or even a book
keeper (though my wife did that job for a number of years for an
architect). Here is how I am doing it.
1. Setup an Asset account for Inventory (or whatever you want to name
it).
2. Setup an account for Cost of Goods Sold. (Mine is a contra
account in Income -- your CPA might want it as an Expense).
3. Divide your inventory value by the number of items (if only one
type of item or break out a similar Cost/Item for each type of item).
4. When you make a sale, reduce Inventory by the COGS for that item
and increase the appropriate account from step 2.
Note, I didn't use Credit/Debit as I forget which one is supposed to
be closest to the window. I think that changed recently when I
switched my desk around and the other side of the monitor is now
nearest the window.
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