Account setup for Periodic Inventory basis in QBO

If you’re adopting a “Periodic Inventory” basis, do not select “Inventory as Detail Type” in the Chart of Accounts. Instead, use Other Current Assets for Detail Type and for the Category Type, Purchases as the account name. For the Detail Type, you never want to use “Inventory Asset”, this happens to be default account name designated for Perpetual Inventory tracking in QBO. If you want to switch later, it creates problems.

Periodic Inventory basis account setup