QuickBooks cost of goods sold report

Inventory tracking has specific effects on your Balance Sheet and Profit & Loss reports as follows:

Balance Sheet:

• The Balance Sheet shows the Inventory Asset accounts that are associated with your inventory-enabled Product/Service items.
• You'll find these grouped under Other Current Assets.
• The asset balances show the cost of your current (unsold) inventory.
• If your business operates on a cash basis, you'll need to customize the Balance Sheet report and change the accounting method to Accrual in order to see these balances.

Profit & Loss:

• The P&L report shows the Sales of Product Income accounts and the Cost of Goods Sold (COGS) accounts that are associated with your inventory-enabled Product/Service items.
• COGS accounts are displayed in a separate section of the report between the Income and Expense sections.
• The difference between your Total Income amount and your Total COGS amount is shown on the Gross Profit line.
• If your business operates on a cash basis, you'll need to customize the P&L report and change the accounting method to Accrual in order to see the correct Gross Profit amount.

Cost of Goods Sold is an account that reflects the cost of materials and goods held in inventory and then sold. When you sell an item from your inventory, Cost of Goods Sold increases by the amount you paid for that item when you purchased it. The difference between the income from the sale and the increase in Cost of Goods Sold is the gross profit on the sale of that item.