About inventory items and inventory

Available in Microsoft Office Accounting Professional 2008 only.

If your company sells products, you can track inventory. An inventory item is a product that is purchased for resale and is tracked in inventory and on the balance sheet. Inventory items appear in the customer process (on quotes, sales orders, invoices, or customer credit memos) and in the vendor process (on purchase orders, item receipts, or vendor bills).

Working with inventory items

When you set up your company, you can enter items, beginning quantities, and values in Company Setup. The total value of the items is added to your Opening Balances account with a posted date of your company start date.

After you open your company, you can add new inventory items on the Inventory form. 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, Microsoft Office Accounting 2008 credits the accounts payable account for the vendor and debits the inventory asset account. When you sell the items, Office Accounting 2008 credits the inventory asset account and debits the cost of goods sold account.

If the quantity on hand for an inventory item goes below the reorder point that you entered on an Inventory form, an alert symbol appears in the Reorder column in the Item List. Additionally, you can select an Inventory Reorder Point reminder to appear on the Company home page.

If you select the Check for item quantity on hand check box in the Preferences dialog box on the Vendors tab, when you create an invoice with an item that is not in stock, a message warns you of negative inventories.

Accounting 2008 uses the FIFO method of inventory valuation.

Frequent tasks

To learn more about common tasks related to inventory items, click the following links.

Topic link Description
Create an item Learn how to create different types of items.
Edit an item Edit an item on the Item form.
Delete or inactivate an item Learn how to delete or inactivate an item.
Change item prices Update item prices when they change.
Find items in a list View all items.
Create a purchase order from an item record Create a new purchase order from an item record.
Check the status of a vendor record or form Quickly find the status of a vendor record or form.
Print a physical inventory worksheet Count the actual numbers of items in stock and compare them to your records.
Adjust inventory Adjust your inventory for losses or gains.
Applies to:
Accounting 2008