Cost of Goods

[Craig@Clarity]

If you want an more accurate profit and loss statement, you need to factor in closing stock at the end of whatever period you're looking at and then subsequently opening stock for the following day e.g. say you want to see what your actual accounting profit and loss statement is at the 30 April, you'll need to do a stock take at the 30 April and value it at cost price excluding any obsolete or zero value items. You'd then put a journal through QB to Credit closing stock on the P&L and Debit stock in hand on the balance sheet. Then you do a reversing journal on 1 May (Debit Opening stock on the P&L and Credit stock in hand on the balance sheet)

[Lance]

Is this normal for this type of business?

I'll answer the question you didn't ask.
No online business in their right mind carries stock. If you have premises then you need some stock, but if you're online it's madness.

[ladymuck]

Sounds like you're posting to an expense account (P&L) rather than an asset account (balance sheet) per what Abbot says.

[Abbot]

Are you posting the stock to the P&L instead of the balance sheet?

[Gaz_M]

Hi

First time post for ages!

I've set up a new eCommerce Plan B business & signed up for Quick Books to track my accounts (although this isn't specific to Quick Books).

My question is 100% as a newbie to this type of business, so please excuse my naivety.

I need to buy a lot of stock, and will continue to do so to keep my website relevant. What has surprised me is that the cost of goods is showing as a loss in my accounts.

For example - Items sold this month = £500, Cost of Stock this month = £750. Quick Books shows this as trading at a £250 loss, even though the stock of £750 is worth at least £1250 in resale.

Is this normal for this type of business?