Where to post stock purchases

In my business, I buy lots of different items, Sometimes these items are disassembled and reassembled with other parts that were bought it. I don’t think stock control is appropriate and would really complicate things. I do hope to use the ‘Inventory Items’ system so I can easily invoice items out.

I need to be able to post all my stock purchases into 1 account and maintain the stock on hand value by regular physical stock takes.

My questions:

  1. Is this a reasonable way to do it?
  2. Where would I post the stock purchases? It is an asset not an expense I would imagine.

Also, maybe I should create a new thread, but: In the first year of my business I was running it our of my personal account. I have now completely separated my bank accounts. Where should I post any personal items? I’m thinking I create a Capital Account and call it ‘Drawings’ and post all personal transactions in there.

You seem to be on the right path, create an Asset account called “Purchased Stock” where you would post your stock purchases which can be maintained by the regular physical stock takes.

If you create saleable items from those items you could transfer them from the Purchased Stock account to Inventory Items (Inventory On Hand) which would enable you to easily Invoice them.

Drawings would be the correct account to use for items taken from the business for personal use


Thank you for the response.

Since I can only post bank transactions to P&L items, does that mean I have to create a "Stock Purchases’ expense account and post to there? How do I get it into the asset account?

No, you can post bank transactions to both BS and P&L when you click on Account

All I see under Account is Income, Expenses, Liabilities and Equity

Have you created accounts within these groups in your chart of accounts?

Yes. In fact I just noticed that for some bank transactions I can see Assets, but in others I can’t. I haven’t figured out what the difference is yet.

Can you post a screenshot of your Settings - Chart of Accounts, please

For cash transactions (receive/spend) the Cash & Cash Equivalents account will never be visible in the dropdown. As you have the Inventory Items tab activated, the Inventory on Hand account also wont be visible until you have selected an actual item. However, Purchased Stock should always appear in the dropdown when ever the Account field is selected - if this is not occurring, please provide a screenshot example of that dropdown.