Account Decisions

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What these account types mean

Inventory asset
The value of stock on hand. A balance sheet account, not the P&L. If stock is never relieved when something sells, the balance sheet keeps carrying inventory you no longer have.
Cost of goods sold
Where the cost of the thing you sold is recorded. If no COGS account is set, the cost is never recorded at all — so gross profit looks higher than it really is.
Adjustment offset
The other side of an inventory count correction. Every adjustment has to balance to something. If it points at a cost account, routine count corrections show up as cost of sales even though nothing was actually sold or lost.
Income
Where the money from a sale shows up on the P&L. Getting this wrong reports revenue under the wrong product line. It does not change the total you earned, only where it appears.

Inventory asset account

Confirmed Inventory asset stocked products Set by the app
11515

Every stocked product's inventory value is held here. The app sets this, because MOM does not track a separate account per product.

What this means: All stocked products share one account, so nothing is split by product line here.

Cost of goods sold — stocked products

Confirmed Cost of goods sold stocked products Set by the app
50055

When a stocked product sells, its cost is recorded here. Confirmed correct, and this is where every product cost currently lands.

What this means: Confirmed against the month-end journal entries already used today.

Cost of goods sold — service products

Needs a decision Cost of goods sold service products Set by the app
50055

Service products currently carry the same cost account as stocked products. They most likely should carry none at all, since there is no stock behind them.

What this means: No effect on invoices today — services record revenue only. It would matter if a service were ever bought on a supplier bill.

Inventory count-adjustment offset

Needs a decision Adjustment offset stocked products QuickBooks default
Inventory Shrinkage (no account number)

When counts are re-synced from MOM, the difference has to post somewhere. Right now it goes to a built-in QuickBooks account that is not on our chart, and that nobody picked.

What this means: Count corrections currently look like cost of sales. There are two unused accounts already on the chart that may be the right home: 50057 Inventory Variance and 50059 Inventory Variance-WorkLife.

Fallback income account for unmatched lines

Needs a decision Income all QuickBooks default
40100 Product Sales

When a line cannot be matched to a product, its revenue still has to go somewhere. Today it lands in the general Product Sales account, mixed in with everything else.

What this means: Whatever is chosen has to be an Income account — QuickBooks will not accept any other type here. A dedicated account would make unmatched revenue easy to spot; the current catch-all hides it.

Cost of goods for unmatched lines

Needs a decision Cost of goods sold all QuickBooks default
No account set

For an unmatched line, no cost is recorded at all and stock is not reduced — not merely recorded in the wrong place.

What this means: Gross profit looks higher than it is, and the balance sheet keeps carrying stock that has already shipped. The real fix is to stop lines reaching this state, rather than choosing an account for it.

Needs a decision (4)

  • Cost of goods sold — service products — currently 50055
  • Inventory count-adjustment offset — currently Inventory Shrinkage (no account number)
  • Fallback income account for unmatched lines — currently 40100 Product Sales
  • Cost of goods for unmatched lines — currently no account at all

To record a new decision, or to change one of these, send a message in Teams or use the Feedback button in the corner of any page. Someone will add it here.