cost of goods sold account and inventory adjustment

All info. were added when I added new item to my item list.

please answer my question 1 as well.  Thanks!

When you add new item(s) to your item list along with a quantity on hand at the time QB will take the value of item(s) and post it to an open balance equity account by default.  Check your chart of accounts for the account balance and run a quick report to verify those transactions.

You can then do a journal entry now or at the end of the year to move that amount from open balance equity account to retained earnings. 

Got it.

QB puts the inventory adjustment transactions into the inventory asset account.

Another related question:

say I spend $1000(including shipping) ordering 100 items with my credit card,  how can I record the credit card transaction such that $1000 is tied to the inventory cost of $1000 and inventory count of 100 items?  I know $1000 cannot be counted as expense until goods are sold.

all costs associated to bringing your item(s) is considered COGS.  You could create a freight in account type of cogs and use the expense tab.

OR

you can allocate the freight evenly over item(s) received within the items tab

OR

if other vendor costs associated with your item(s) are received at a later date you can add that to the value of your item(s) via inventory adjustment.  - see article below:

http://www.cpa911.com/read_art...

if this has answered your question(s), please rate and select solved to close the thread.  if it has not, please post back with more questions.

say I spend $1000(including shipping) ordering 100 items with my credit card, how can I record the credit card transaction such that $1000 is tied to the inventory cost of $1000 and inventory count of 100 items? I know $1000 cannot be counted as expense until goods are sold.

When you use the enter credit card screen, click on the item tab, enter the items being ordered and the qty and cost.

When you use the items tab that tells QB to assign the costs to that item.

Retained Earnings is an account that is created on the first of the new year automatically.  Net Profit from last year is posted to Retained Earnings automatically so that current year net profit can be calculated starting from zero for that new year.

Opening balance equity is an account to hold the equity of items and cash that the books start with.  Opening balance equity should be rolled up to the owners equity account, then retained earnings is rolled up to owners equity account,  usually at the start of the new year.