How to Track Changes in Stock Level

When you purchase stock you should record an expense which is allocated to the 'Cost of Goods Sold' account. However, often the value of stock purchased during a period will not match the value of stock sold. In this case, you need to record an adjustment to reflect the true cost of goods which have been sold.

Firstly, create a new asset account to track the value of your stock. Click menu File > New > Account:

Set the Account Type to 'Asset' and name the account 'Inventory'.

At the end of each month create a new General Transaction to track the change in inventory. Click menu File > New > General Transaction. The transaction details depend on whether the value of your stock has increased or decreased.

If your stock has INCREASED:

• Set the Journal Memo to 'Adjustment for Increase in Stock'
• Set the From Account to 'Cost of Goods Sold'
• Set the To Account to 'Inventory'
• Set the Amount to the net increase in the value of your stock over the period.

Here's an example:

If your stock has DECREASED:

• Set the Journal Memo to 'Adjustment for Decrease in Stock'
• Set the From Account to 'Inventory'
• Set the To Account to 'Cost of Goods Sold'
• Set the Amount to the net decrease in the value of your stock over the period.

Here's an example:

You can see the balance of the Inventory account over time in the Account Activity screen: Click menu Window > Account Activity, then set the Account field to 'Inventory'