Can someone explain to me how does Cost of Goods Sold in a manufacturing comany is posted in QuickBooks.
I am auditing a company that does not follow any accoutning standards. And the explaanations given by their accountant leaves much to be desired. Now i am not familar with the operation of QuickBooks and I know accounting principles and these do not addup.
I understand that COGS with respect to manufcacting includes direct costs and finished goods. However this person has approximately 20 catergories under COGS, which consists of all DIRECT COSTS. e.g COG-Inventory, COG-Salaries, COG-meals etc.
Further, the person posts raw materials purchased to A/P and cost of goods sold-Inventory. example a/p has a posting of $2 it goes to COGS-I as $5.
She explained that this happens automatically. I cannot accept this as true.
Do you need so many catogaries of COGS.
In ACCPACC there is one COGS I have never encountered this before. HELP!
