tax/shipping on inventory purchases?

Aug 03, 2010 3 Replies

QB 2010 Help states the following. I take it there is no way to correctly allocate the shipping and taxes on purchase of inventory items to the actual inventory, other than manually adjusting the cost per item to include these expenses?



"Note: For inventory item purchases, you can associate expenses such as tax or freight charges with your cost of goods sold accounts (COGS) instead of with an expense account."



Treating all the shipping and taxes as COGS for items still held in inventory isn't correct.


-Mark Bole



Yes you are correct on all accounts. You'll need to allocate the extra costs to the individual Items purchased so that the correct cost is recorded.

I looked for the passage in the help file and could not find it. What did you use as a search criteria?

Search "You should never enter discounts or shipping charges on a purchase order. Instead:[...]"

(in case that gives you something else to search for)

-Mark Bole

Found it and I do not agree with their suggestion concerning using the expense tab and posting the charges to COGS. I do agree with not putting those charges on the purchase order as QB will pull the total charges from the bill or check.

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