What is the difference between cost of goods sold and food purchases?
when you own a restaurant what is the different between the cost of goods sold and food purchases?
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dmbKb61mCr3QjyacfA8pyY
11/18/09 8:55pm PST
Viewed by asker 12/05/09 7:58pm PST
Viewed by asker 12/05/09 7:58pm PST
2 Replies
LauraD
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11/19/09 11:30pm PST
Create a cost of goods sold account named Food Purchases. You might want to create another for Liquor Purchases and, if applicable, Paper Products.
Use the specific cost of goods sold type account when purchasing anything that your customer will use/consume.
Restaurant supplies (an expense account) would be used for small tools, paper products (not used for doggie bags/take-out), etc.
Does this help?
Laura D
My motto:
Keep it as simple as you can. . .with only as much detail as you need.
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Laura Dion
Cents-able Bookkeeping, LLC
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Keep it as simple as you can. . .with only as much detail as you need.
When in doubt, make a backup first!!
*****
Laura Dion
Cents-able Bookkeeping, LLC
www.centsablebookkeeping.com
12/13/09 3:07pm PST
Latest post
Food (and beverage) purchases simply reflect the actual purchases for an accounting period (most typically monthly) but do not inform you of the true cost of goods sold. That number, and associated percentage of your gross sales, takes into account the difference between your beginning and ending food (and beverage) inventories. If you really want to know your true cost of goods sold (another way of saying the amount of food and beverage you actually used to generate the sales for the corresponding period) then you need to take a compete "physical" inventory count of your food and beverages (at cost) at the end of each accounting period. The difference between the beginning and ending inventory is then recorded in QuickBooks as a General Journal entry. This results in your actual Cost of Goods sold for that period being reported in your monthly Profit and Loss Statement. Here is a link that describes the procedure in more detail. Best of luck.
http://www.rrgconsulting.com/I...
