Cost of Good Sold

Setup

TurboCASH stands out

because it has a stock system that spans from services to manufacture at various levels of accounting accuracy. Cost of Goods Sold COGS is configurable.

Setup > Stock Info > Cost of Good Sold

If you run a Service business, you probably do not need COSs. Leave these Check Boxes empty.

Project Leader Philip Copeman

Business Class

Images in this tutorial are from TurboCASH Business Class V 5.2.408
For $6 per month or $60 per year, you get TurboCASH 5.2.408 plus a free Accounting Made Easy Manual

Take this if you are serious about business

Example

HANDYMANA, An example with preloaded data

It is best to create a new set of books and works with a copy of HANDYMANA. You may want to run these exersises more than once. Create a new set of books > Copy an existing set > Browse > Bin\handymana

Example

HANDYMANA contains 8 preloaded documents. See

Note IN000008 To Roger Smith for 2000.

Example

When you post the document

Note the cost of sales data posted per invoice

Transactions

Setup your Stock

Before you start processing documents, you need to be absolutely sure that all settings for Stock items, Cost of sales and Documents are correct.

Steps

When you first set up TurboCASH, it is important that you either enter a purchase or do a stock take-on for each stock item, before entering any invoices. By doing this you are giving TurboCASH the cost price of the stock item.

The cost price is used to update the Cost of sales and Stock accounts, when an invoice is created. Therefore, if TurboCASH does not have a cost price, the cost of sales account will be updated with a zero amount. This will cause your gross profit to be over inflated.

Note the cost of sales is posted per document

Caution

The required accounts and settings be absolutely correct before you proceed with purchasing and selling of trading stock items in a Set of Books.

If this is not done, you may find incorrect results in TurboCASH. For example, the Cost of sales transactions may not be generated when documents are posted to the ledger or the cost of sales may be calculated at average cost in stead of latest cost, etc.

Before you start processing documents, you need to be absolutely sure that all settings for Stock items, Cost of sales and Documents are correct.

Costing

The to “use average cost” or “latest cost”, setting is very important for calculating the value of your stock.

If you are not sure whether to “use average cost” or “latest cost”, please consult with your accountant. The value of your stock can affect your profit and loss figures.

Posting

Transactions are Posted

On posting Transactions are created and posted in the correct Batch.

If you set COS off, then no cost of sales transaction are posted. You will need to pass Cost of sales journals using opening stock, closing stock and purchases.

Posting Invoices

Trading stock items (Default stock item type)
Purchases (Purchase journal)	Invoices (Sales journal)
DR - Stock item (net cost price - Input Tax Excluded) DR - Input Tax (% of purchase price) CR - Creditor (full amount - Input Tax Included)	DR - Debtor (full amount - Output Tax Included) CR - Sales (selling price - Output Tax Excluded) CR - Output Tax (% of selling price)
	Cost of sales journal
	DR - Cost of sales (cost price) CR - Stock (cost price)

Supplier Returns

The transactions for Supplier returns (Credit notes received from creditors (suppliers / vendors)) are exactly the opposite than those of purchase documents (Invoices received from creditors (suppliers / vendors)).

The transactions for Credit notes (issued to debtors (customers / clients)) are exactly the opposite than those of Invoices.

Trading stock items (Default stock item type)
Supplier returns (Purchase journal)	Credit notes (Sales journal)
DR - Creditor (full amount - Input Tax Included) CR - Stock item (cost price - Input Tax Excluded) CR - Input Tax (% of purchase price)	DR - Sales (selling price - Output Tax Excluded) DR - Output Tax (% of selling price) CR - Debtor (full amount - Output Tax Included)
	Cost of sales journal
	DR - Stock (cost price) CR - Cost of sales (cost price)