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      What are the Inventory Accounting Entries?

      Acctivate creates entries each time you purchase, receive, adjust quantity, sell or process landed cost for inventoried items.

      Acctivate QuickBooks Inventory Software creates entries each time you purchase, receive, adjust quantity, sell or process landed cost for inventoried items. Here are some example journal entries created by Acctivate followed by an overview of transactions.

      Account DR CR
      Inventory Asset $750  
      Accrued Purchase Receipts   $750
      Inventory Receipt of goods, with or without a Purchase Order

       

      Inventory Adjustment $50  
      Inventory Asset   $50
      Inventory Adjustment for inventory that was broken in the warehouse

       

      Inventory Asset - TO Warehouse $50  
      Inventory Asset - FROM Warehouse   $50
      Inventory Transfer for inventory moving between warehouses

       

      Inventory Asset - Finished Good Warehouse $50  
      Inventory Asset - Raw Material Warehouse   $45
      Non-inventoried Cost Offset Account - Labor Warehouse   $5
      Inventory Assembly to build a finished good out of raw materials, including Labor

       

      Gain/Loss on Inventory $250  
      Inventory Asset   $250
      Gain or Loss on Inventory due to an Inventory Balance Adjustment

       

      Accrued Purchase Receipts $750  
      Expense Account(s) for Other Amounts $50  
      Accounts Payable   $800
      Vendor Purchase Invoice (Vendor Bill) for Inventory and Other Amounts

       

      Accounts Receivable $150  
      Sales - Widgets   $100
      Sales - Gadgets   $50
      Customer Sales Invoice for Products and/or Services

       

      Cost of Goods Sold - Widgets $50  
      Cost of Goods Sold - Gadgets $25  
      Inventory Asset   $75
      Cost of Goods Sold (COGS) from Sales Invoice above

       

      Inventory Asset $150  
      Accrued Landed Cost   $150
      Landed Cost allocation for Inventory Receipts, Transfers, Assemblies, etc

       

      Accrued Landed Cost $150  
      Accounts Payable   $150
      Landed Cost Purchase Invoice (Vendor Bill) from the vendor for freight charges from previous transaction.

       

                                                                      Sales Invoice
      Transaction Type Debit Account Credit Account Note
      Release Invoice Accounts Receivable based on Branch selection Sales Income  
      Journal for Inventoried Products Cost of Goods Sold Inventory  
      Journal for Non-inventoried Products     Taken care of by entry of vendor invoices unless using non-inventoried cost offset accounts in Warehouse
      Journal for Non-standard Products     Taken care of by entry of vendor invoice

       

                                                                    Purchase Invoice
      Transaction Type Debit Account Credit Account Note
      Inventoried Products Accrued Purchase Receipts (Purchase account on WH) Accounts Payable  
      Non-inventoried Products Cost of Goods Sold Accounts Payable COGS account selected based on Product Class or other group for Sales/COGS setup
      Non-standard Products Expense Account Selected Accounts Payable User manually selects the GL Expense account on the PO Invoice
      Other Amounts (not Landed Cost) Expense Account Selected Accounts Payable User manually selects the GL Expense account on the Other Amounts tab
      Other Amounts for Landed Cost Accrued Landed Cost Accounts Payable Only when Landed Cost is included on Vendor Bill

       

                                                                  Drop Ship Wizard
      Transaction Type Debit Account Credit Account Note
      Sales Order Release for invoicing Accounts Receivable Sales Income  
      Purchase Invoice Cost of Goods Sold Accounts Payable COGS account selected based on Product Class or other groups for Sales/COGS setup

       

                                                                Inventory Transactions
      Transaction Type Debit Account Credit Account Note
      Issue Expense Account Entered Inventory Default can be set on Warehouse
      Receipts Inventory Accrued Purchase Receipts With or without a Purchase Order
      Landed Cost Inventory Accrued Landed Cost  
      Adjustment/Count Inventory Adjustment Account Inventory  Depends on positive or negative amounts
      Balance Adjustment Gain/Loss Account Inventory Depends on positive or negative amounts