How to Record Inventory in Journal Entries on QuickBooks
The traditional way to record inventory in QuickBooks involves accessing the various related accounts in your Banking or Vendors section, depending on the manner in which you are receiving inventory. Instead of switching between sections and accounts within QuickBooks, set up an asset account to track inventory. Then, you can use the Make Journal Entries window to record inventory into a central list that also provides you with your total inventory value. Journal entries are ideal if your company doesn't track large amounts of inventory.
Click the "Lists" menu and then select "Chart of Accounts."
Click the "Account" button and "New."
Select "Other Asset" in the Type field.
Click "Continue" and enter a name for your asset, such as "Current Inventory."
Click "Save & Next."
Click the "Account" button, and then click "New."
Select "Income" in the Type field.
Click "Continue" and enter an account to offset the purchases from your Current Inventory account. You can name it "Purchased Inventory" or something similar that reflects the type of inventory you have.
Click "Save & Close."
Click the "Company" menu and select "Make General Journal Entries."
Adjust the date and enter a number into the Date and Entry No. fields, if necessary. Once you have entered a number for the first time, QuickBooks automatically numbers your entries.
Click the first blank line in the Accounts column and select your Inventory account.
Enter the number that corresponds to the cost of your increase or decrease in inventory in the Debit or Credit column. Increases in inventory are marked as debits, while decreases are marked as credits.
Type a memo in the Memo column, if desired.
Enter the name of the inventory item, or select from the available options in the Name column.
Click the next line in the Journal Entry window, select the "Purchased Inventory" account in the Account column and provide the information for the inventory item you are tracking. This line should have the same information as the one directly above it, with the exception of the Account and Credit or Debit columns.
Enter the number from your Current Inventory Debit or Credit column into the opposite column here. For instance, if you had a credit in your Current Inventory, you must place a debit in your Purchased Inventory equal to the amount of the debit.
Click "Save" when finished entering your inventory.
Remember that for each increase or decrease in inventory, you must have an equal and opposite decrease or increase in income.
Information in this article applies to QuickBooks 2013. It may vary slightly or significantly with other versions or products.