Assets and bills

[Dale Alspach]

I am not using the business portion of gnucash yet, so part of this is
based on general accounting.
You should have an inventory asset account. The label "expense account" is
not correct in this case. (I have accounting labels turned on but I see
"expense account" too, Is this a bug -version 1.8.1? )
Because you are selling these items they are an
asset but of a different type than fixtures, buildings, etc., and usually
treated diferently in reporting. You expense to a cost of goods sold
account when an item is sold.
(The default business account tree does not seem to have the correct set of
accounts for an inventory based business.)

Purchase inventory:

Enter bill:
debit inventory asset
credit accounts payable

Sell item:

credit inventory asset for cost of item
debit cost of goods sold for cost of item
credit gross income from sales for price of item to customer
debit accounts receivable (or undeposited funds,  petty cash or checking if a
cash sale) for price of item to customer

Dale Alspach