@mimoore wrote:
I have a construction company and we purchase materials for jobs, but we do not bill the materials to the customer as an individual line item. The materials are included in the total cost of each job performed. I set up our materials as non-inventory items used in assemblies or purchased for a specific customer/job. I have the expense account as job materials purchased. What income account should I be using? I currently have it set up as job income, but it's not really income because we do not upcharge material. Am I setting the items up incorrectly? Should I be using COGS instead of the job income account or should I be just setting them up as non-inventory items and not check the box for items used in assemblies or purchased for a specific customer/job?
The way the item works, when you purchase it the cost posts to the expense account
when you sell it, the sales price posts to the income account selected, sales income usually
So the purchase price only posts once when purchased, if the sales price is zero, zero posts to income when you sell it - but if you do not use that item on the sale, nothing posts to income at all.
COGS, at tax time revolves around inventory, so I would use a materials expense, job expense, et account and not COGS, but many do use COGS
