Initial Inventory from QB

CarolynY

I'm switiching over from Quickbooks, how do I record the initial inventory I have? It's about $5K. (I sell apparel)

Mikeg

@CarolynY,
If you are transferring your books and records then you should create a journal entry to post the opening balances in Wave. This would include your opening inventory.

CarolynY

Thanks, I assumed it was a journal entry. What is the other side of that entry. For what I understand, journal entries need to balance out.

Mikeg

@CarolynY,
You would use the report from QB, either a balance sheet or trial balance. If you are transferring as of the beginning of the year and you are a sole prop or single member LLC then you would post as a journal entry the closing balance sheet from QB as of 12/31/2020. Begin using Wave for 2021 transactions. From the balance sheet your assets would be debits and liabilities and owner equity would be credits. If you have accumulated depreciation, that is also a credit. If you opt to transfer mid fiscal year, then the trial balance would be the report to use because it has the year to date income and expenses. Both reports balance so your journal entry would as well. Same applies, assets are debits, liabilities are credits, income is a credit and expenses a debit.

CarolynY

I think I understand this, thank you. I plan on switching over Jan 1. Thank you!

CarolynY

I'm circling back to this - are the two accounts I'd use to report the opening balances:
1. Inventory - Debit
2. COGs - Credit

Correct?

Mikeg

Nope. If you are switching Jan 1 then only the balance sheet is posted. Since it is the start of a new fiscal year (I'm assuming) there is no COGS. COGS is an expense account.