When Inventory is purchased, should the cost be placed under "Cost of Good" or "Inventory"? Is another option to make a category of COG under each inventory type? I/E: COG-hats, COG-coats etc.
Thanks for your help.
Don
[email][email protected]

When you purchase inventory, you put it under inventory, NOT “Cost of Good”

Debit Inventory 100
Credit Cash (or Accounts Payable or whatever) 100


As for your second question, sure you can.

On your income statement, it can look like this

Revenue:
Hat Revenue 100,000
Coat Revenue 200,000
Net Revenue 300,000

Cost of Goods Sold
COGS Hat 60,000
COGS Coat 120,000
Net COGS 180,000

Gross Profit 120,000

etc.

Dear CaptainForest: Thanks for your answer it was a big help. In my POS program (Retailman), when I enter a new item (product) it asks for the sales account number and the COG account number. I guess I am confused about what to put in the COG block. Should this be my inventory account or my COG for that item? Thanks again for your help.
Don