accounting for "sold" inventory

[Maf. King]

On Wed 17 July 13 13:29:05 Jay Hyde wrote:
> Hi,
> I am trying to use gnucash to run my small business.
> 
> I have experienced a huge problem.
> 
> My business does 3 things:
> 1) Buy a product and sell it
> 2) modify an existing product that I do NOT own
> 3) create new products to sell.
> 
> So far, I have only modified an existing product (#2).  This was easy, I
> just did the work, created an invoice and Gnucash put the money in
> "accounts receivable." That was fine.
> 
> I recently bought $1,000.00  of items for re-sale, so I put $1,000.00 in
> an account called "inventory."  I don't need to "track" the inventory,
> just the dollars of inventory I HAVE.  I sold an Item for $10.  This was
> fine, but I still have $1,000 in the "inventory" account AND AN
> ADDITIONAL $10 IN "ACCOUNTS RECEIVABLE."
> 
> How do I "account" for the reduction in inventory?
> How do I reduce the "inventory account" by the $10 that I sold?
> 
> Jay
> 


Hi Jay,

I think you need a "Cost of Goods Sold" (CoGS) account - have a look at an 
accounting book or hunt on the web and see if that sounds like the sort of 
thing that will help you.

HTH,
Maf.