Glad to have you here, @quinn1,

Cost of Goods Sold (COGS), often referred to as the cost of sales or services, are all the costs involved in selling a product. This includes direct material and direct labor expenses that go into the production of each good or service that is sold.

COGS does not include indirect expenses, like certain expenditures that support the business but do not generate revenue.

Let's say for example, if you're in a furniture industry, examples of COGS would include the wood, screws, hinges, glass, paint, and labor used to make the goods you sell. However, the costs to market them, the electricity needed to operate the machinery, and shipping are not included in the Cost of Goods Sold Account.

If these materials does not contribute in generating income, you may create a new expense account for them. Here's how:

1. Go to the Settings ⚙ icon and select Chart of Accounts.
2. Click the New button.
   
3. From the Account Type ▼ drop-down menu, select Expenses.
4. Choose a Detail Type ▼ from the drop-down menu.
5. Enter a name for the account or use the suggested name.
   
6. Hit Save and Close when done.

Once done, assign the Expense account to the item in the Products and Services page. Use this article to learn more about adding items and lists in QBO: Adding Products and Services, Customers, and Vendors to Lists.

Feel free to contact me if you have follow-up questions about QuickBooks. I'll be available to provide further assistance. Have a good one!