I entered several POs yesterday, entered bills and paid the bills. All of these items are now showing up in COGS on my Income Statement rather than as Inventory Asset in my Balance Sheet. I have not sold them to any customers. What did I do wrong?
It may be due to several company settings.
Follow the following step-by-step instructions:
#1 Products and Services settings ON > Company Gear (upper right corner) > Settings > Company Settings > Sales > Products and Services > All three selections should be ON
See attached photo 1.
#2 Bills and Expenses Item settings On > Company Gear (upper right corner) > Settings > Company Settings > Expenses > Bills and Expenses > All three items related settings should be ON
See attached photo 2.
#3 Track quantity on hand checkbox > Company Gear (upper right corner) > Lists > Products and Services > New > Product or Service Information form > Checkbox (I track quantity on hand for this product. This enables inventory cost accounting)
See attached photo 3.
#4 Item details section to enter inventory purchases > Create + sign > Vendors > Bill (or Expense or Check) > Select Item details (not Account details section) > Select Product/Service column to enter inventory purchases
See attached photo 4.
#5 Quantity available to create Invoice or Sales Receipt > Company Gear (upper right corner) > Lists > Products and Services > Quantity column should show quantity available to sell (no negative quantity, it will create problems down the road)
See attached photo 5.