[GNC] How to handle inventory assets in GnuCash?

[Stephen M. Butler]

Eric,

As you noted, they are an Asset.  Now, I'm not a CPA or even a book 
keeper (though my wife did that job for a number of years for an 
architect).  Here is how I am doing it.

1.  Setup an Asset account for Inventory (or whatever you want to name it).
2.  Setup an account for Cost of Goods Sold.  (Mine is a contra account 
in Income -- your CPA might want it as an Expense).
3.  Divide your inventory value by the number of items (if only one type 
of item or break out a similar Cost/Item for each type of item).
4.  When you make a sale, reduce Inventory by the COGS for that item and 
increase the appropriate account from step 2.

Note, I didn't use Credit/Debit as I forget which one is supposed to be 
closest to the window.  I think that changed recently when I switched my 
desk around and the other side of the monitor is now nearest the window.

--Steve

On 12/20/22 06:55, Eric Chapman wrote:
> I am wondering how, in GnuCash, to account for assets bought to resell 
> or other assets that will later be expensed as used.
>
> I'm in the USA context. As far as terminology goes, I think UK and 
> other English speaking locales use the word "stock" to refer to 
> inventory, but, in my experience, that is not common in the USA 
> (indeed, the first definition of "stock" from Apple Dictionary: "the 
> goods or merchandise kept on the premises of a business or warehouse 
> and available for sale or distribution"; that is basically the 
> definition of "inventory" at the bottom of the wiki article referred 
> to below). I will try to use the word "inventory" so I do not confuse 
> the term I'm talking about with the one meaning ownership securities 
> of a company ("He owns 100 shares of XYZ Company stock.").
>
> I found something relevant in the wiki: 
> https://wiki.gnucash.org/wiki/Inventory_Handling. Best I can tell, 
> GnuCash does not have any dedicated way to handle inventory flows: 
> purchases, sales, revaluations for market fluctuations, identification 
> of lots/batches).
>
> If I want to deal with inventory now in GnuCash v. 4.13, any best 
> practices? I'm not talking about massive amounts of items or quantities.
>
> Thank you!
> Eric
>
>
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-- 
Stephen M Butler, PMP, PSM
Stephen.M.Butler51 at gmail.com
kg7je at arrl.net
253-350-0166
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