You are expecting the cost of goods sold at the wrong time. It is
unrelated to when the goods are obtained (added to inventory)
To perhaps make this easier for you to see, we'll use an example from
one of "my" org as "organizations which had tee shirts, both sold to
supporters AND given to volunteers as "recognition". In other words,
when we bought a batch of tee shirts, we don't (yet) know how many will
end up being sold and so affect the expense "cost of goods sold" and how
many the expense "recognition".
So lets say we buy another batch of 100 @ #7.20 So we debit
inventory:tee shirts:debit batch 5 $720 and credit checking $720
NOT (yet) an expense. inventory is an asset so it's just one type of
asset (money) to another (tee shirts)
Now we get back a report from the group who tabled at an event. They
sold seven tee shirts for $29 each. There were still four remaining from
batch 4 (@ $7.15 and three from the new batch 5 (@ $7.20). So the
complete transaction looks like this (if entering as a two way split --
you could instead use two transactions to avoid that)
Debits
Cash $100
Cost of goods sold $50.20
Credits
Sales $100
batch 4 $28.60 << note batch 4
now cleaned out so could be hidden if desired >>
batch 5 $21.60
<<< note -- doing inventory FIFO and on the cash basis so invoicing
and when those paid not involved ---- and you could instead have done
in multiple transactions to avoid the two way split >>
But really Eric, this isn't a gnucash question. You aren't asking how do
I enter this but "what accounts should I be debiting or crediting?"
Gnucash is a tool that automates double entry bookkeeping and those of
us who learned doing it the old way pen and ink on paper can appreciate
what it is doing for us. But you STILL need to learn the basics of
accounting/bookkeeping. If the tutorial isn't enough for you, obtain a
beginners text (paper or virtual)
Michael F Novack
On 6/17/2023 2:50 PM, Eric Hammond wrote:
First, what is the proper way to reply / request to this email sequence?
I follow the instructions at the end:
"Please remember to CC this list on all your replies."
"You can do this by using Reply-To-List or Reply-All."
But only end up with "gnucash-u...@gnucassh.org" and get mildly chastised for
not replying properly.
My tax accountant needed me to supply cost of goods sold, "COGS", but I have
not figured out how to do this
Current sequence:
I schedule a visit with the client, and determine the likely need for a widget
of some type.
I purchase it ahead, and document with a Purchase order. At some point I
receive it and log it into Inventory.
Original attempt:
Item Acct Dr Cr
-------------------------------------------------------
Widget Payables $10
Inventory $10
--------------------------------------------------------
Payment Bank $10
Payables $10
Clean, but no COGS entry. My best attempt is this:
Item Acct Dr Cr
-------------------------------------------------------
Widget Payables $10
COGS $10
--------------------------------------------------------
Payment Bank $10
Payables $10
And when I get the part from vendor:
Item Acct Dr Cr
-------------------------------------------------------
Widget Purchases $10
Inventory $10
I am ok with the extra step, but what kind of account is Purchases?
Is this even proper accounting?
Thank you!
Eric
------------------------------
Subject: Digest Footer
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