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    harshy's Avatar
    harshy Posts: 2, Reputation: 1
    New Member
    		  
    #1

    Aug 28, 2006, 04:36 PM
    Inventory cost
    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]
    CaptainForest's Avatar
    CaptainForest Posts: 3,645, Reputation: 393
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    #2

    Aug 28, 2006, 06:58 PM
    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.
    harshy's Avatar
    harshy Posts: 2, Reputation: 1
    New Member
    		  
    #3

    Aug 28, 2006, 08:05 PM
    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
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