5. Setting Up Inventory
Inventory can be described as a company’s merchandise, raw materials, and finished and unfinished products that have not yet been sold.
QuickBooks can track the products you purchase, stock, and then later sell to customers. QuickBooks can also track the products you assemble (a component) and use to create a product for sale (finished good). QuickBooks has a perpetual inventory system, meaning each time you record a purchase transaction, inventory is increased, and when you record a sales transaction, inventory is decreased. (See the “Proper Inventory Processes” section later in this chapter.)
QuickBooks Pro, Premier, and Enterprise Solutions record the cost of inventory using the Average Cost method in contrast to LIFO ...
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