Hi:
1210 and 1220 are separate Inventory accounts, while 5000 and 5010 are separate Cost of Goods Sold accounts. Each "set" of these Inventory and Cost of Goods Sold accounts pertain to two separate inventoried items.
In the Sales Invoice that I posted for these two items, you'll notice from the screenshot below that the total amounts for these Inventory and Cost of Goods Sold accounts were "backed out". Essentially, the effect for Inventory and Cost of Goods Sold was a "wash".
Now, these two items were sold at a low quantity and FIFO is the inventory valuation method.
In this test company, the quantities of all inventoried items had been first imported without a Unit Cost. That's because we have not been given initial cost figures by this client. In any case, these imported quantities each were around 20.
In order to provide a Unit Cost for each of these two items, I entered a Positive Adjustment of 5 with an estimated cost for each item and did so prior to posting this Sales Invoice.
Did the posting of this Sales Invoice produce a "wash", because the initial imported quantities of the items were at a $0.00 Unit Cost layer?
Thanks!
John
