Inventory Quotes - COS or Asset Account
Hi,
Accounts used:
5-0501 Cost of Goods Sold - Inventory (Profit & Loss)
1-1801 Inventory 2 (Balance Sheet)
We have a client who create quotes (adding a job to it). He uses a COGS account eg. 5-0501 when the quote is created - this means the stock is going through the profit and loss, but it should not hit the P&L yet as the goods are not sold yet.
A suggestion by their head office is to use another Inventory account eg. 1-1801 Inventory 2 and keep all the stock in here until such time as the quote is converted into a Bill.
The reason for using the COGS 5-0501 account is to be able to "get the stock out" linked to the spesific job number and to add the labour component to the bill as well.
What is the best way to deal with this:
1. have the stock coded to the liability account 1-1801 Inventory 2 and then journal the total out to the COGS 5-0501 at month end/when the quote is converted into a bill OR is their a better way to do this automatically in MYOB? Do not want to create unnecessary journals?
2. Should the stock be coded to the 5-0501 account when the quote is drafted and then work the other way around by adjusting the stock to 1-1801 at month end?
