 cookies left over the difference between the beginning balance plus the purchases minus the ending count is the amount of cookies that I presumably sold. Although you might have you might have lost some some might have spoiled you might have dropped one of the ground someone might have stolen one like they stole my chair. And so that could have happened as well. But that's the general idea and then you can make a periodic adjustment into your into your QuickBooks system decreasing the dollar amount of the inventory in QuickBooks and recording the cost of goods sold at the end of the month or the end of the day or the end of the shift or the end of the year on a periodic system. We're going to use a full perpetual inventory system here however so that means that we're gonna have we're gonna have transactions both on the purchasing side and on the customer side or the sales side. On the purchasing side the easiest kind of inventory purchase would simply be you're gonna use a check form or expense form to buy the inventory and then you would just buy if you bought it physically at that point in time you can record it at that point in time or if you're ordering it and you're paying for it at the point in time you order it then you'll typically just use an expense form possibly even being able to use the bank feeds that will flow through and record the expense form. But if you're ordering the inventory but you're not paying for it at that point in time that's when you might use the purchase order something like manufacturing things often times like in China you might be able to come up with a new kind of thing that you're manufacturing and possibly have it manufactured in China because it's typically cheaper to manufacture there and then maybe you can have a situation where they ship you the stuff before you pay for the stuff right if that's the case you're entering a purchase order for the request of the stuff and then when they when you get the stuff that's when you're going to receive it and at that point in time you'll typically enter the bill or possibly an expense form recording both the inventory in terms of dollar amount the inventory in terms of units and the payment if you make an expense form or the accounts payable if you're entering a bill at that time. Once you have the inventory on hand you can of course sell them so we have guitars on hand we would imagine when we sell the guitars we're going to sell them with either an invoice form or sales receipt form the sales receipt form being the one that we can think about doing when we're at a check register the invoice being the one that we would use when we're not at a check register and we're we're billing someone sending them the invoice by email or something like that but the sales part of it is much the same we're going to record what the client can see or the customer can see the sales price what they're going to owe us including sales tax and what is not included if using a perpetual inventory system will also be recorded behind the scenes in a similar fashion as when you're at the grocery store for example if you have one of those self-checkouts and you scan your item it gives you what the cost is to you right what the sales price is what you're going to pay but that system is also recording on a perpetual inventory system the cost to the store using some kind of flow assumption that's what we're going to be setting up here as well with the help and the use of the items so it'll it'll actually reduce the inventory and dollar amount and count and record the the cost of goods sold when we sell it alright let's check it out then so if I go back on over here to the to our sheet we're going to go to the first tab and we're then going to go into our plus button and we're in the vendor cycle so we're entering a purchase order we're imagining we're going to our vendors and we're saying we need stuff and I'm going to hit the drop-down we we're going to go to Epiphone that's who we our main vendor is for our guitar sales we would typically want an email because oftentimes we would be issuing this externally with an email this is also a form that you might want to customize given the fact that you will be providing it to a customer meaning you might want to put your logo on it and that kind of stuff so the mailing address if it was necessary you would have that but we only included the name for the vendor I'm tapping through this by the way ship to now notice it's defaulting to shipping to our address we're going to imagine that that's our warehouse address but if you wanted to ship it some place else likes to a customer for example you might have a system where that is the case if you chose Anderson guitars then this field will populate based on the clients shipping address and you could you can use a system like that if you so choose but we're gonna imagine it's coming to us in our warehouse in Beverly Hills 90210 and we're gonna say that we don't actually have a warehouse there by the way but I'm just that's what I like to use because no one no one remembers the TV show 90210 anymore I didn't but that's what that's that's that's the zip code that just comes to mind all the time so any case so so 112 other than mine I don't want to use my zip code because that would be weird so any case shipping address ship area and then down here notice the category field is not populated because we're not going to assign it to a category because if we used a category it would assign it just to the account like inventory but would not be tracking the inventory on a perpetual inventory system so we would only use this category field if we're not tracking the inventory on a perpetual inventory system in our books meaning not the units of inventory so I'm going to use the item and we set up the items before you will recall so we're going to put some multiple lines on here in accordance to what we put in the product list which you can find under the sales section we did in a prior presentation so I'm going to say ELP so this is going to be like the abbreviation that I put in for it I probably should have listed the name and then put that in the SKU number but it is what it is there it is we'll pick that one up that's an epiphone less Paul if I'm not pronouncing it right or treating it right or this isn't the cost of them we're just making up some stuff here okay so that's not the actual cost now note we put the quantity in the rate that rate is being populated because we put this information into our items list the customer is something that we could populate but don't always need to because obviously when we're purchasing the guitars the people were purchasing it from epiphone doesn't care about who we're selling it to they just want to ship it to us why would we have a customer field then well possibly that can help us to determine once we receive the guitars who we bought them for we can turn around and sell them to a particular