Every “sale invoice” created should post two accounts, one is “inventory-sales” under:
“income” group", another one is “inventory-cost” under “cost of goods sold” for calculation of profit of the said sales. I found the issue is “inventory-cost” does not post the cost of sold inventory. This happens when I have not created a “purchase invoice” firs for the sold item, the “inventory-cost” not post cost for the sold item, but post “inventory-cost” after created a “purchase invoice” the amount is total of “purchase cost” It is any reason
?
Please search forum and also look into accounting help such as accounting coach. As long as inventory is not sold it is an Asset and not an expense.
Maybe I should understand it as when Inventory qty=0, you can create a sales invoice, and post “inventory-sales”, (the inventory list shows a negative number,)but not post “inventory-cost” so the profit of the said sale without deducting the cost.
create an invoice without the customer registered and not collect payment for the invoice and update. the status will show “paid in full”
Please go through the several parts of the Inventory guides it is all explained there, see https://www2.manager.io/guides/11111
Also see https://www.accountingcoach.com/inventory-and-cost-of-goods-sold/explanation such as [emphasis added]:
Inventory is a key current asset for retailers, distributors, and manufacturers. Inventory consists of goods (products, merchandise) awaiting to be sold to customers as well as a manufacturers’ raw materials and work-in-process that will become finished goods. Inventory is recorded and reported on a company’s balance sheet at its cost. [Note added: this is purchased so reduced the bank balance and moves it to assets to be sold.
When an inventory item is sold, the item’s cost is removed from inventory and the cost is reported on the company’s income statement as the [cost of goods sold](https://www.accountingcoach.com/terms/C/cost-of-goods-sold). Cost of goods sold is likely the largest expense reported on the income statement. When the cost of goods sold is subtracted from sales, the remainder is the company’s gross profit.