So I order in stock from supplier and raise a purchase invoice. On it I list the items purchased and the shipping charge and paypal cost as separate entries, which reflect the customer’s invoice.
I add the items purchased to the inventory as they now become assets but how do I account for the shipping and paypal costs. Obviously I want to incorporate these costs into the purchased products so I get a true representation of the cost to my company. Or do I just record these as expenses?
If I record them as expenses and then sell the goods with my profit margin set to cover the expense of shipping then it seems to me that my overall profit on the asset when sold is higher than it is in reality.
How should I record this to reflect properly in the inventory?
Many thanks for your help?