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Cost of Goods Purchased

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The total value of goods received for the current month. This figure is calculated by adding up all the invoices-payable received in the current month where the expense code is between 500 and 599 (or any expense code starting with 5). Memo invoices and invoices for non-merchandise are not included. Checks that were written during the current month for merchandise, but which were not specifically applied against invoices payable in the Jewelry Shopkeeper are also included. (“non-invoice checks” or “hand-checks”) Checks that were specifically applied against invoices payable are NOT included — because that would double-count the expense. Any general journal entries with an expense code starting with 5 are also included in the cost of goods purchased in the month they were posted.

 

Note: (often applies to C.O.D. checks) If you write a check for an invoice before you enter the invoice into the Jewelry Shopkeeper, this is seen as a hand-check so it is included in the cost of goods purchased. If you subsequently post the invoice, that invoice amount is also added to the cost of goods purchased which would result in double-counting. If you simply must post a check before the invoice is entered, then after the invoice is posted, you should delete the check and re-issue the check (using the same check number) specifically against the invoice. (Deleting a check allows you to re-use the number.) However even this solution will only yield satisfactory results if you post the invoice and re-issue the check in the same month that you initially recorded the hand-check.

 

To see a detailed listing of the transactions included in the Cost of Goods Purchased, run a check book report selecting All Bank Accounts plus General Journal Entries. Choose the current month’s date range and sort the report by Expense Code. When asked if you want to match the income statement, choose Yes. Note that this section does not take into account whether or not the invoices were paid this month, just whether they were received this month. Also note that the invoice date is ignored, just the date received is factored.