Hello, @shanbala99.
When you set up your first inventory item in your Inventory List, the system automatically creates the Inventory Asset (Other Current Asset) and Cost of Goods Sold accounts.
Generally, COGS is affected only when you sell the items. This account isn’t meant for the items you use to create your products, such as raw materials.
If the items you bought are used to run your business or part of your inventories cost, you can record them as expenses. However, for those you buy and resell, you can directly add them to your Products and Services List.
Here’s how:
- Go to the Gear icon at the top then pick Products and Services.
- In the Products and Services window, select New.
- Click the product or service type.
- Enter the new product or service information.
- Choose Save and close.
If you want to replenish these items in the future, you'll have the option to use the Expense or Bill functionalities. Just make sure to use the item details field so you can select which one you need from the list. This way, the program will recognize an increase in volume.
You can refer to this article for more insights: Understand Inventory Assets and COGS tracking.
Fill me in if you have other questions. I'm always here to help.
