Startup questions for new business

[Walt Pennington]

I got paid for
 >> the job I did, which was parts and labor.  $80 in labor and $99.99 in
 >> parts.  The expense of the part was $69.99.  How do I correctly recieve
 >> the money against the invoice, paying the Inventory account off and
 >> showing a profit? 
 >
 Inventory does not use income/expese...  Inventory is an Asset.  When
 you buy the inventory it goes from Checking (or A/P) to
 Asset:Inventory.  When you resell the inventory you reduce the
 inventory amount; if you sell for more than you buy then you've got
 income from the gain.

Initial purchase of parts

Asset: Parts & Inventory      69.99
    Asset: Cash (Bank Account)         69.99


Cash payment for parts and service

Asset: Cash (Bank Account)   179.99
    Asset: Parts & Inventory           69.99
    Income                            110.00

Walt