This is not an account settings issue. The account has been set up properly for inventory management since the beginning. These are my current settings for inventory management. They have not changed since I migrated.

There is a bug in how QBO is accounting for sold inventory. QBO will sometimes put sold inventory into the COGS account on the P&L after a sale, and sometimes it won't. There is no rhyme or reason.

As I said, I already spent 1.5 hours on the phone with QBO support and walked them through the issue I'm experiencing. They AGREED it was a bug and escalated the issue. 

What I'm seeking is other people that have experienced this problem.