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Chapter 3
Chapter 4
Chapter 5
Chapter 6
Chapter 7
Chapter 8
Chapter 9
Chapter 10
Chapter 11
Chapter 12
Chapter 13
Chapter 14
Chapter 15
Chapter 16
Chapter 17
Chapter 18
Chapter 19
Chapter 20
Chapter 21
Chapter 22
Chapter 23
Chapter 24
Chapter 25
Chapter 26
Chapter 27
Chapter 28
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Chapter 28

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Setting up inventory tracking

Start by turning on inventory.  Click File|Preferences|Purchases & Vendors and check the box Inventory and purchase orders are active.

Inventory part items are set up as described in chapter 6, which names no less than 14 things to consider when setting one up. The respective items must be homogeneous.  Within any one inventory part item, each unit is identical to all the others, like gallons of fuel oil or bushels of barley.  QuickBooks will not track individual units of one item, or differing units of measure. If you buy glue in cases of 24 bottles, to be broken down and sold by the bottle, expect to encounter a sticky situation.  You can handle this using inventory adjustments, as described below in the Minimal System for manufacturing.

When you start to set up an Inventory Part item (see Chapter 6), QuickBooks will set up an OtherAsset type account XE "account:inventory"  XE "inventory account"  called Inventory Asset.  This account will be entered as a default when an item is created.  It works well and should be left as is.  The Inventory Part window includes a box labelled COGS Account and pre-filled with the account named Costof GoodsSold and ofthetype Cost of Goods Sold .  An account for recording income from the sale is also specified under IncomeAccount.

When an inventory item is originally set up, you may have stock on hand, which can be entered in the New Item window.  The total value will be entered into Inventory Asset based on the unit cost specified, with the opposing entry in Opening Bal Equity.

 

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Last modified: May 21, 2004