 the other side is going to go to inventory for the surfboard putting it on the books for 100 and tracking the sub ledger for inventory. I don't need to make it billable because I don't want to pull this into the invoice. We will create an invoice because I'm going to turn around and sell this to the customer, but we're going to create the invoice from from the sales order in our case. So if I record that in a journal entry format over here, I could say let's do it with a journal entry. What's going to happen? We're going to say the inventory is going to say equals the inventory is going up and the other side is going to be equal to the accounts payable. That's it. And it should be over here. I'm going to I'm going to copy that and put that over here. I've have to cut it cut it and put it over here. And then I got a format paint this down here. Sorry about that. And this is going to be a bill type form for $100, $100, negative $100 inventory up top. Let's record it. Inventory is going to go up by the $100 and then the the liability accounts payable is going to go up. Both of those accounts have a sub ledger to them inventory. We need to track it by units of items typically and accounts payable. We need to track who we owe by the vendor. Notice nothing is happening down here for the cost of goods sold at this time because we're using a perpetual inventory system. So I'm going to go back on over. Let's check that on this side. I have to make it smaller so I can see the button to complete the transaction. So I'm going to save it and close it save it and close it. And then back up to false super sized. And then we're going to go on over to the balance sheet to see what happened K. Paso what happened. We're going to say that the inventory went up the inventory went up there. I said it because I said I was going to say it. We're going to say the inventory went up the inventory went up there. I do what I say I'm going to do. So there it is $100 bill inventory goes up. The other side went to the AP accounts payable. So there's the accounts payable double clicking on it. It's going up. We can see if we have the sub ledger for the vendor vendor. We could see the AP vendor balance detail. We can see the bill here if I find that customer because I know I should have numbered it. There it is. That's the same as normal. So nothing really new with because we're really the new thing has happened on the customer side not the vendor side. We can also see that of course in the vendor center. So now we've got the bill and we would have to pay the bill later but we're not going to do that right now because that's not our point of focus. We're on the customer side. So now if I go back to the home page we now have made the estimate sales order. We've got a down payment and then we use that possibly to help us purchase the custom surfboard which we now have because it shipped to us. Now we're going to create an invoice and we're going to apply that $50 to it and then the remaining balance will still be due right. So we're going to say all right this is the critical moment here because we have to apply that credit out. So if I go into the customer center now I can see over here it looks nice from the bookkeeping side because I can see that $50 and I can see that I would apply that to the invoice just like we did with the negative accounts receivable method. So let's go ahead. I could go into the sales order and say let's make an invoice from it. Now I'm going to create the invoice from the sales order and I'm going to say make a oh no wait yeah that's right make the invoice and then create the invoice for all yes and that's what I want to do. So then I'll tab it through this is going to be 0609 let's say 27 tab, tab, tab, tab, tab, tab, tab and so now the invoice pulls in and we're charging $175 we bought it for $100 sales tax is going to be charged for $1356. What's this going to do when we actually record it it's actually kind of complicated the invoice is going to cause accounts receivable to go up by the $188.56 the other side is going to be revenue $175 the amount that we charge the different sales tax $1356 is going to be going to a liability account and inventory is going to be going down by $100 which is not on the report but is driven by the item and cost of goods sold is going to go up by $100 the effect on net income will be the sales price $175 minus the cost of goods sold $100 and the sub ledger for accounts receivable will be impacted for customers as well as the sub ledger for inventory tracking the items so actually a lot going on here and so we're going to say let's check that out in a journal entry format and let's check that out from a journal entry format that's what I'm going to say that's what I said so we're going to say that this is going to be accounts receivable is going to go up wait let's do it this way this is going to be an invoice and then a to the r is going up accounts receivable for the sales for the sale and then the sales is going to go up or income and that's going to be for $175 and then we're also going to say that there's going to be sales tax payable sales tax payable which they're charging us apparently 0.075 so this should be a negative because it's a credit this should be equal to this times 0.0075 no too many zeros so 1313 and negative sum for the plug here is going to be then that means we're going to charge 188 13 188 188 hold on 0.0775 sales tax 0.0775 188 56 is that right okay good thing I checked all right and then we're also going to have then the cost of goods sold for the $100 that's the cost of the inventory and we're going to have the inventors going down by the