Читать книгу QuickBooks 2022 All-in-One For Dummies - Nelson Stephen L., Stephen L. Nelson - Страница 47

You must record the expense of the hot dogs and buns that you sell. You must also record the fact that if you use up your inventory of hot dogs and buns, your inventory balance has decreased. Table 2-12 shows how you record these items. Cost of goods sold gets debited for $3,000, and inventory gets credited for $3,000.

TABLE 2-12 Journal Entry 8: Recording the Cost of Goods Sold

Account	Debit	Credit
Cost of goods sold	$3,000
Inventory		$3,000

If you’re confused about this cost-of-goods-sold transaction — it represents the first transaction that doesn’t use cash — read Book 1, Chapter 1, where I describe the two accounting principles. In short, these two principles go like this:

 Expense principle: This principle says that an expense gets counted when the item gets sold. This means that the inventory isn’t counted as cost of goods sold or as an expense when it’s purchased. Rather, the expense of each hot dog and bun you sell gets counted when the item is actually sold to somebody.

 Matching principle: This principle says that expenses or cost of a sale get matched with the revenue of the sale. This means that you recognize the cost of goods sold at the same time that you recognize the sale. Typically, in fact, you can combine journal entries 7 and 8.

Another way to think about the information recorded in Journal Entry 8 is this: Rather than spend cash to provide customers hot dogs and buns, you spend inventory.