Each time items are marked as shipped they will be removed from stock and the cost of goods sold accounting journal will be created.
These types of journals are always in base currency.
There are two settings which affect the date and accounts used on a cost of goods sold journal. These settings allow cost of goods sold at the point the items are shipped or on the same date as the revenue is recognized. Find these options at Settings > Company > Accounting: Options.
- Use invoice date as posting date for cost of goods sold (for orders invoiced before shipping)
When ON the cost of goods sold journal will be posted to accounting with the same date as the invoice.
When OFF the cost of goods sold journal will be posted to accounting with today's date.
- Defer cost of sales for orders shipped not invoiced (for orders shipped before invoiced)
When ON the cost of goods sold journal will be posted to accounting right away and with today's date, however, the value will be recorded in a "deferred cost of goods" account code. When the items are invoiced this value will be moved cost of goods sold with an additional journal with the same date as the invoice.
When OFF the cost of goods sold journal will be posted to accounting with todays date and straight to cost of goods sold.
Where multiple items are within the same shipment, each goods-out note row results in two journal rows as described above.
When cost of goods sold is deferred at point of shipping, an additional journal is created at the point the order is invoiced. This will move the deferred amount to the relevant cost of goods sold account.
To understand the affect of these settings on journals, use the decision tree below: