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A client is using and tracking inventory on hand. They purchased 10 widgets at $10 each...

A client is using and tracking inventory on hand. They purchased 10 widgets at $10 each and 10 widgets at $15 each. All of the widgets are sold in one transaction.

Considering QuickBooks Online uses the FIFO method for tracking inventory, what is the best way to see line items affected in the sales transaction?

  1. Run a Balance Sheet, and select Inventory on hand to see the transaction history
  2. Open the customer invoice, and select the transaction journal
  3. Run an Inventory Valuation Summary
  4. Run a Profit & Loss, and select Cost of Sales account to see the transaction history

Solutions

Expert Solution

(Q) A client is using and tracking inventory on hand. They purchased 10 widgets at $10 each and 10 widgets at $15 each. All of the widgets are sold in one transaction.Considering QuickBooks Online uses the FIFO method for tracking inventory, what is the best way to see line items affected in the sales transaction?

(Ans) The correct answer is option 'A' - Run a Balance Sheet, and select Inventory on hand to see the transaction history

  • First In, First Out (FIFO) is a concept used by businesses that track Inventory. QuickBooks Online will always consider the first units purchased (First In) to be the first units sold (First Out) and will adjust your assets and Cost of Sales (COS) accordingly whenever sales of inventory items are entered. Inventory tracking has specific impacts on your Balance Sheet and Profit & Loss reports. The Balance Sheet shows the Inventory Asset accounts that are associated with your inventory-enabled Product/Service items.

ekkarill92 answered 2 years ago
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