Newbie with a startup business

[Aaron Gaudio]

On Wed, 2004-08-25 at 16:29 -0600, Wiggins d Anconia wrote:
> > On Wed, 2004-08-25 at 11:59, Pierre Abbat wrote:
> > > I'm starting a business and I have a few transactions to put into
> the GnuCash 
> > > file. I set up a chart of accounts and am not sure what to do next.
> I have a 
> > > homegrown database with transactions and accounts, where each
> supplier is a 
> > > separate account. Here's an example transaction set:
> > 
> > First, IANAA.
> > 
> > You're going to have to account for your inventory in one of two ways:
> > As an Asset, containing the value of the inventory
> > -or-
> > As an Expense.
> > 
> > That allows you to consider the last two conditions as monetary,
> > leaving: (I've considered Inventory an Asset)
> >
> 
> Still new to GnuCash, but couldn't you setup a commodity for each of the
> items you want to inventory (assuming you aren't walmart, aka have a
> reasonably small number of items), then supply their current price and
> store the inventory in terms of number of items? You might (if possible)
> consider having two commodities, aka one for the current purchase price,
> and one for the current sale price, assuming you are making a profit. Or
> does this only work for things such as stock?

IANAA, but unless you actually are talking about a commodity or a
security, I don't think this would fall under acceptable accounting
rules, which means it's probably not very useful to do this. Typically,
I believe inventory is valued at its cost of production up until the
time you actually sell it (in which it's not inventory anymore, but
gross income).