Accounting for sales of goods from another

Hello, I am starting to sell a book on my website. I pay another party to print and ship the book to me and then I will sell to someone else. I imagine I'd use the Sales category for the sale to an individual, but what's the best way to account for the expense side where I paid to have the book printed? COGS or would that be considered a different business expense? How would you use the categories?

Best Answer

  • Tom Young
    Tom Young SuperUser ✭✭✭✭✭
    Accepted Answer
    If you incur the cost for printing and shipping only after receiving an order, the COGS is certainly the correct Category to use.

Answers

  • Tom Young
    Tom Young SuperUser ✭✭✭✭✭
    Accepted Answer
    If you incur the cost for printing and shipping only after receiving an order, the COGS is certainly the correct Category to use.
  • jlaveck
    jlaveck Member ✭✭
    Thank you @"Tom Young" . I was planning to keep a small inventory because of the turnaround time for printing.
  • Tom Young
    Tom Young SuperUser ✭✭✭✭✭
    "I was planning to keep a small inventory because of the turnaround time for printing. "
    In that case I'd create an Asset Account to hold those costs.  Then as orders are placed you'd expense an appropriate amount from the Account (decreasing the Account's balance) to COGS.  If you're incurring the cost of shipping at that point that too would be expensed. 
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