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Set up inventory accounts

To do this task

  1. Turn on inventory tracking, if you have not yet done so.

    To do this task

    Only the QuickBooks Administrator can do this task.

    1. Open the items and inventory preferences.

      To do this task

      1. Go to the Edit menu and click Preferences.

      2. In the list at the left of the Preferences window, click Items & Inventory.

      3. In the list at the left of the Preferences window, click Items & Stock.

      4. Click the Company Preferences tab.

    2. On the Company Preferences tab, select the Inventory and purchase orders are active checkbox.

    3. Click OK.

    The next step in using inventory tracking is setting up the inventory accounts you need.

  2. Add the following inventory accounts to your chart of accounts:

    Note: For any of these accounts, you can set up subaccounts within the account to track the value, income, or costs of different types of inventory.

    • Inventory Asset (account type = Other Current Asset): This account tracks the current value of your inventory. You don't have to create this account—QuickBooks creates it automatically when you set up your first inventory item.

    • Sales Income (account type = Income): This account tracks the income from the resale of inventory items. QuickBooks may have already created this account for you based on the information that you entered in the EasyStep interview.

      Check to see if the Sales Income account exists

      Go to the Lists menu and click Chart of Accounts. See if an account called Sales Income is in the list with Income in the Type column.

    • Cost of Goods Sold (account type = Cost of Goods Sold): This account tracks the cost to you of the items you have sold. On a profit and loss report, QuickBooks subtracts the total cost of goods sold from your total income to provide a gross profit before expenses. You don't have to create this account—QuickBooks creates it automatically when you set up your first inventory item.

  3. The next step in using inventory tracking is adding the inventory part items to your item list.

KB ID# H_INVTRY_SET_UP_INVTRY_ACCOUNTS
7/28/2014 11:26:46 AM
PPRDQSSWS402 9102 Pro 2013 49883f