What is Inventory Item?

Inventory item – is a separate product which can be specified in stock.

If your company sells stock items, you can track inventory. An inventory item is a product that is purchased for resale and is tracked in Stock and on the Balance Sheet. Inventory items appear in the customer process (on sales quotes, sales orders, sales invoices, or customer credit notes) and in the supplier process (on purchase orders, purchase invoices – Supplier bills, or supplier credit notes).

Working with inventory items

After you set your company and finish Accounting Getting Started page, you can add new inventory items on the Products/Services listing page. This form allows you to enter detailed information about the item, including the accounts to charge when you buy and sell the item, quantity on hand, and reorder point.

When you purchase and receive items, kpi.com Accounting and Finance credits the Pending Goods Received Notes account and debits the Stock asset account. When you convert this Purchase order to purchase invoice it credits the Accounts Payable account for the supplier and debits the Pending Goods Received Notes account. When you sell the items, kpi.com Accounting and Finance credits the Stock asset account and debits the Materials Purchased, cost of goods sold account.

kpi.com Accounting and Finance uses the FIFO method of inventory valuation.

See also