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How to Categorize Purchases

Shay47130Shay47130 Member Posts: 4

I'm a screen printer. When I make a large purchase of shirts, how do I categorize the purchase?

in Accounting Technical Support

Comments

  • MikegMikeg Member Posts: 995 ✭✭✭

    @Shay47130,
    Wave does not support accounting for inventory. For clients, I recommend just categorizing the purchases for resale i.e. blank T-shirts to Purchases. At the end of the year you will need to determine how many T-shirts you have on hand and their cost. From there, you make a journal entry to Debit Inventory and Credit Purchases. By doing this, you are effectively truing up your purchases for what was actually sold during the year.

  • Shay47130Shay47130 Member Posts: 4

    I'm not worried about accounting purposes for inventory. We buy just enough shirts for each job. I'm talking about under "Expense Account", the are a list of sub-categories....Accounting Fees, Advertising, etc...which of those should I list the materials we use under?

  • MikegMikeg Member Posts: 995 ✭✭✭

    @Shay47130,
    You should have an account Purchases as it's a default account in Wave. If you wish to create a new account that would work as well.

  • Shay47130Shay47130 Member Posts: 4

    I don't see a default "Account Purchases". I did create a subcategory under "Expense Account" and called it "Apparel for Decoration".

  • motoramblermotorambler Member Posts: 53 ✭✭

    I use a category called "Cost of Goods Sold" for this purpose. So, if I buy 50 shirts for $1000 & sell them for $1500 I would expense the $1000 line entry in transactions as "Cost Of Goods Sold".

  • ldhuangldhuang Member Posts: 2

    @Shay47130,
    I have similar questions and am trying to figure out a way to do that. Can you kindly share how you created a new subcategory under "Expense Account"? I hope to do that but did not find a way yet. Thank you for your time.

  • Shay47130Shay47130 Member Posts: 4

    @Idhuang
    If you look at your transactions, and when you see "Choose a Category", click on that drop down menu. Scroll all the way to the bottom and there will be (in blue) "+ ADD A NEW ACCOUNT".
    Just click that and from there you can create a new account under whichever category you wish.

  • ldhuangldhuang Member Posts: 2

    Thank you Shay47130! It's very helpful!

  • QaisEQaisE Member Posts: 72 admin

    Way to go everybody! I love the discussion you all are having - keep it going! The Community works best when we can all share our best strategies on how to use Wave :). Thank you all for keeping the discussion alive!

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