Recently I noticed account “Inventory - cost” under expenses have a positive value, upon clicking on it, I found the value is the sum of all items’ costs included in an inventory kit, shouldn’t this cost be in “cost of sales” like all other inventory sales we have?
To clarify more, I have 5 items as inventory items, each item average cost (calculated by manager) is 17.20, I created an inventory kit out of these 5 items (one of each item), now every sales invoice issued to a customer containing this inventory kit adds 17.20 five times to the “Inventory - cost” expense account, if the customer bought 2 inventory kits, it will add 34.40 five times as well, the total of this “Inventory - cost” expense account grew to 3,611.65 so far.
I think this should not be the place were inventory cost is assigned, what i’m missing?
You can move this account to where ever you like on the P & L in Settings/Chart of Accounts either by assigning it to a different Group or by moving it using the up/down arrows
You could also look at which inventory items have been affected to this account and change them to affect the cost of a different custom expense account in a different part of the P & L statement
I figured that I can assign these costs to the “Costs of sales” in settings, but why are those costs added to this account while all other inventory items’ costs are not?
@sigmas55, understand that Inventory - cost is the built-in cost of sales (or cost of goods sold) account. This is where the cost of all goods sold will be posted unless you assign an inventory item to a custom expense account. Cost of Sales on your chart of accounts is just a group name, not an account at all.
Because you obscured the important information from your Summary page, it is not possible to guess how you have things set up. To really understand things, we would need to see Edit screens from the inventory items and inventory kit involved, and a clear version of your chart of accounts.
Also, while you can assign income from inventory kits to a custom income account, you cannot assign cost to an expense account different from the expense account(s) to which the component items are assigned. Remember, inventory kits are not different items. Kits are just a shortcut for selling a group of existing items together.
Your answer shed some light on the issue, now I know that since I assigned a custom expense account for all inventory items; this is why their cost does not add to the “Inventory - Cost” expense account.
But the strange thing is that all the 5 components of the inventory kit in question are assigned to a custom expense account (see screenshots below), and still their costs are added to the “Inventory - Cost” account rather than the assigned expense account.
This screenshot is an edit page for one of the 5 compenents of the inventory kit in question, the other 4 items have the same custom accounts:
Here is an edit page for the inventory kit:
You have this first statement backwards. Yes, you assigned a custom expense account for all inventory items. But their costs of sales are being posted to Inventory - cost. They should not be.
Here, in your second paragraph, you correctly described what is happening. Before I put this into the bugs category, what version number are you using? Make sure your software is up to date, because there have been many new releases in the past few days. Let me know if the problem remains after updating.
Also, can you please post a screen shot of a drill-down on the cost of sales account for these inventory items? I want to check for possible double-posting.
EDIT: Never mind. I can reproduce this bug. I have moved it to the bugs category and changed the title.
@lubos, custom expense accounts for inventory kits are being ignored. Cost of goods sold amounts are being posted to the default Inventory - cost account, even when all components are assigned to other custom expense accounts.
Fixed in the latest version (20.7.51)
Thank you guys, problem solved after the update