QuickBooks Tip – Understanding QuickBooks Inventory Cost

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If you are using QuickBooks to manage your inventory, you need to understand how QuickBooks deals with the cost of inventory items. Unfortunately, the term “cost” is used in several different ways, and it can get confusing. Here is a quick rundown of how QuickBooks handles things. I’ll focus on Inventory Part items, which are the true “inventory” items in QuickBooks, with a little detour to talk about Inventory Assembly items. Cost Fields in QuickBooks If you look at an Inventory Part item, you will see that there are two cost fields. Cost, on the left, is a "reference" field. That is, it doesn't have any direct bearing on the valuation of your inventory, the cost of your inventory in your inventory asset account. I wish they had another name,…
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