Inventory asset account is the chart of account in your QuickBooks Online that helps you track the worth of stock in your warehouse.
Let's assume, you have following two products in QuickBooks Online:
1. Name: 'Levis Shirt', Selling Price: '150', Cost Price: '90', Quantity on Hand: '10', Inventory Asset Account: 'Inventory'
2. Name: 'Puma Shirt', Selling Price: '120', Cost Price: '70', Quantity on Hand: '10', Inventory Asset Account: 'Inventory'
In the above scenario, the inventory asset account - 'Inventory' will have the total amount of 1600 in QuickBooks Online.
- The first product contributes 90 X 10 = 900,
-
Second product contributes 70 X 10 = 700.
So, the total worth of inventory assets is 1600.
Note: 1. Cost price is the key attribute for calculating inventory assets.
2. All the numbers used in the above example are in USD.