Most businesses use just one asset account for tracking inventory value. However, if it makes sense for you to track the value of different types of inventory in different asset accounts, you can create additional accounts of the type Other Current Asset and select them as you create new inventory items.

QuickBooks automatically adds the Inventory Asset account to your Chart of Accounts the first time you create an inventory item. Each time you create an inventory part item or inventory assembly item, QuickBooks preselects Inventory Asset as the asset account for the new item.

QuickBooks pulls information from the Inventory Asset account (and any other asset accounts you may create and assign to inventory items) to generate the Inventory Valuation Summary report and the Inventory Valuation Detail report.

The Cost of Goods Sold account is added to your chart of accounts the first time you add an inventory item. QuickBooks uses this account to track how much you paid for goods and materials that were held in inventory and then sold.

While an item is held in inventory, its value is tracked in the Inventory Asset account, which is also added to your chart of accounts when you create your first inventory item. As soon as that item is sold using an invoice or sales receipt, its value is taken out of the Inventory Asset account and put into the Cost of Goods Sold account.

An account that QuickBooks automatically adds to your chart of accounts the first time you add an inventory item. QuickBooks uses this account to track how much you paid for goods and materials held in inventory that you eventually sold. After you enter a sale, QuickBooks adjusts your costs of goods sold by multiplying the quantity sold times the average cost of each item.

Your chart of accounts lists the type for this account as “Cost of Goods Sold.” You can set up subaccounts to track costs for different types of inventory sold.

Note: When you create your first inventory item, the Inventory Asset account is created. ]]> http://accounting-software.bara.net/?feed=rss2&p=25 0 http://accounting-software.bara.net/?p=23 http://accounting-software.bara.net/?p=23#comments Mon, 03 Aug 2009 22:16:21 +0000 admin http://accounting-software.bara.net/?p=23 An account that QuickBooks automatically adds to your chart of accounts the first time you receive a payment from an invoice or sales receipt. QuickBooks uses this account to hold money you’ve collected until you deposit it in a bank account.

The Payroll Liabilities account tracks taxes that you deduct from employees’ paychecks and hold temporarily until you turn them over to the government. These include federal and state income withholding taxes, local taxes, and the employee-paid portion of taxes such as social security and Medicare.

If you use the Assisted Payroll service, your payroll liabilities account should show zero amounts for liabilities that are paid by the service.

The Payroll Expenses account tracks payroll items that are an expense to your company. These include salaries, wages, bonuses, commissions, company contributions such as a company-paid health plan, and the company-paid portion of taxes such as social security and Medicare.