How To Set Up The Cost Of Goods Sold In QuickBooks ?
The Cost of Goods Sold is the feature available in QuickBooks that helps you in tracking the costs that are related to all the items sold by you. It is so because you allow it to track the gross profit by calculating it properly. In profit and loss reports, it also shows you the underlying total cost.
The COGS is affected when you sell all the items on the sales receipt or invoices. After selling the inventory you can run the report of Transaction Journal for all these receipts and invoices.
You can add the new account using the Chart of Accounts in the QuickBooks. After that, all the items are assigned to the accounts accordingly. You can manage and track these items easily. With this, you easily get to know about the stock of your inventory left and sold. Also, you know about your expenses and profits with the items.
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Step By Step Process Setting UP Cost Of Goods Sold QB
The method to set up the Cost of Goods Sold (COGS) in QuickBooks
- In the QuickBooks account
- Go to the QuickBooks Menu and then click on the Lists option
- From further options select the Chart of Accounts
- Now select the option Account that is the menu item
- Then click on the New option for adding the new account in it
- After that, you have to select the account type as Other Account Types
- Click on the Cost of Goods Sold from the list of options shown to you
- Then click on the button Continue
- In the Number text box, type the Chart of Accounts number
- Type the name in the Account name properly
- To select your currency click on the drop-down arrow and select from the further options
- Now fill all the remaining necessary information according to the requirements
- Click on the Save and Close button to save all the information for the new account
- In the end, the new account is created.
The Cost of Goods Sold affects the average cost of the items and also the number of items available for sale. Each item’s cost is calculated according to the average cost of all the similar items available in the inventory. To do the correct calculation you have to run the Inventory Valuation Summary report.
For getting the average cost and quantity of items in QuickBooks desktop account
- Go to the Reports
- Then click on the Inventory
- Now select the option Inventory Valuation Summary
- Set the dates to the All
- After that, double-click the item in the question that helps you in showing the Inventory Valuation Detail report.
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