 In this presentation, we're going to add cost of goods sold type of accounts that will be used as we go through our job costing system. Get ready because here we go with zero. Here we are in our job costing company dashboard. We're going to start off by jumping over to our Excel sheet to see what our objective will be. So here's going to be our Excel sheet. Now when we enter this information into the system, as we go through the job costing process, we're going to be recording this in essence to a cost of goods sold account that we're then going to be assigning to jobs. So that's what we're going to be doing here. We have the cost of goods sold account down here, which we're basically further breaking out and being able to track them by job or project, our jobs and our example problem being job 14, job 15, and job 16. Then we're further going to break that information down into our example problem in Excel with the direct materials, direct labor and the factory overhead. So those are going to be the three kind of components of the cost of goods sold main account on the general ledger. And then we can further break that into more components in our zero accounting system. And that's what we'll focus in on here. We're going to make these three accounts, these three accounts that are going to be the supporting accounts for the cost of goods sold accounts on zero's chart of accounts that we can then expand or collapse down to just basically a cost of goods sold account on the general ledger and then track this information by project. And within right now, we're going to add more items for the direct materials, which will include these items, which are going to be in another subcategory of the direct material. So this will all make more sense as we start to go through the problem. But that's going to be our objective. So to do this, let's go back on over to zero. We're going to be setting up our information. Now we're going to be going to the chart of accounts. We do that by going to the accounting dropdown and scroll it on down to that chart of accounts. You'll recall that the chart of accounts is going to be in order assets, liabilities, equity, income, and expenses. We're in the all accounts section here. We're really looking at kind of expense type of accounts, but more specifically the cost of goods sold. We could go to the expenses tab here and see if that allows us to focus in on where we want to be and it does. So here we have it. We have the cost of goods sold account here. And what we want to do is add more accounts that are going to be basically within the account type of cost of goods sold. I'm going to add the parent accounts, which are going to be our three major factors, which will be direct materials, direct labor and overhead. And then we'll get into the subcategories within them. So let's do that. I'm going to say before we do, however, just note terminology here. We have the cost of goods sold is the name. The account type is direct costs. So if you're using other accounting software, such as like a QuickBooks, this account type would be cost of goods sold type of account. So just be aware of that type of terminology. We're going to be setting these up as direct costs. You could think of them as kind of cost of goods sold type of accounts. And then we're going to go up top and say add accounts. Let's go up and add account. We're going to pick the account type with the dropdown. It's going to be in the expenses section. We want that direct costs item. I'm going to select the first item number. It's going to be 510. So we'll put it at the 510. We're going to pick up the name. Then we're going to be picking up the name. And I'm going to put the name as materials. Let's put it direct materials. So we'll say direct materials. Description is optional. I'll keep that as is. And so we have, I'm not going to enter any of the tax information. So I'm going to go ahead and then save that. So if we save that, then there is our 510 direct materials. I'm going to do this for now direct labor. So I'm going to go back up top and add an account. We're going to add the account. We're going to pick the account once again under the expense area. It's going to be the direct costs, direct costs. Then I'm going to pick the code. I'm going to say 550 this time. And then I'm going to say this is going to be direct labor. So direct labor, that's it. I'm going to go ahead and say save that one. So there's our direct labor. Let's do it again. This time I'm going to go for factory overhead. So I'm going to add another account. I'm going to say this is going to be an expense type of account as well. So I'm going to go back on down. We want to make this an expense or under the expenses the direct costs. And then we're going to make the code for this one. Let's make it 580. And this is going to be put in the name here, overhead. Now notice that the numbers I'm leaving in a lot of space so we can then put basically sub-accounts within there. So I'm going to call this overhead. So that's going to be an overhead account. So then I'm going to say OK. And that's going to be kind of like our catch all of accounts, what would be kind of like the parent accounts if you were working with a QuickBooks system. It'll also help us to line up the account number so anything related to direct materials will be within the account number 510 to 550 and between 550 and 580. That'll be the direct labor. We'll talk about how to group this information on the financial statements later. It's a little bit different than QuickBooks Online. We're not going to have the same sub-account feature here. But don't worry about that. We still want to put this information in this format. And then when we get to the reports, we'll show you how you can format the reports and you can have some neat formatting systems that can come out to a similar kind of formatting system you might find in a QuickBooks that would use something like sub-accounts. So it's just a different system. So we'll talk about that later. But here we're going to keep on adding accounts. Now I'm going to add accounts that are going to be within the direct materials. In other words, within the account range of the 510 to the 550. So I'm going to go back into Excel. And that's going to be this list. It's going to be in column AC in the Excel worksheet under the example tab. I'm just going to copy each of these. I'm going to set them up as accounts over here under basically the cost of good sold type of account or direct costs. So I'm just going to copy that. We're going to add another account. We're going to add another account. The accounts type is going to be the direct. Let's see if we can type it in there now. Be a little bit faster. This is going to be, let's make this 512. So I'll make it 512 and the description and the name. So there is that. I'm going to do this again. We're going to repeat this process. So there it is. It's going to be in between or right under the direct materials, not a sub account in the same feature or in the same way as with QuickBooks online or desktop. But we will be able to format the report. So we'll talk about that later. Plaster and gypsum board. I'm going to copy the plaster and the gypsum board. I'm going to make a new account. We're going to be adding accounts up top. And I'm going to say that this is, I'm going to paste the name here while I remember it. And this is going to be a direct cost. So we'll pick up the direct cost and let's make the code 514. 1213, we'll skip a number a few times. So in case we have another one that goes in between there. So then we're going to save that information. So I'll save the gypsum board and then we'll go on back on over and say now we have the cement render. So cement render going to be picking up the cement render. And then we're going to add another account for the cement render. I'm going to call this, this is going to be the direct cost and the code. Let's make it 516. And then the name cement render and save that. So there is that. Let's go back over and continue this process. Next we have the ceramic tile, query tile, the different kinds of tile. And so we're going to then go add another account. So we'll add another account, same kind of process. It's going to be a direct cost account. And we're going to be picking this up for the 518. So it's going to be 518. And there we have it. So that looks good. And we'll save that. So let's go ahead and save that and then continue on back on over to Excel to see the next one. And that's going to be a dropped ceiling. A dropped ceiling. So we'll pick that up. And we're going to say this is going to be another. So we're going to add here. We'll add here. And then I want to pick up, this is going to be a direct cost again. So we got the direct cost. And then the code is going to be five. What are we at? 520 now, 520. And then there's the name. Let's do it again. We're going to say save and let's do it again. So now we only have a few more to do. We're like halfway there. So let's go to the flooring. Flooring. This is going to be the wide plank floor. Very nice, very fashionable. And we're going to say this is going to be a direct cost, direct cost. And we're going to pick up the code here for 522, 522 flooring. And then save that one, 522. Back on over to Excel. Now we have the marble. Marble is nice. I like marble. I want to carve statues. And then I'm going to say add account. And we're going to say this is going to be the direct cost, direct cost. And this is going to be for 524. And then we have the marble. So we're going to add that one. And then we'll go back on over. We're going to do this a few more times, of course. We've got the wall covering, which includes things like the wallpaper. And so we're going to say add a new one for the wall covering. Got to cover those walls. You can't have a naked wall over there. We're going to say this is going to be the direct costs, direct costs. And the account number we are on now at this point is 526. So we're going to put that here. 526, because that's what we're on. And there we have the wall covering. Let's add that one. Continuing on, continuing on. Next one, we have the paint, wood stain, and fox finishing. So paint is not under the wall covering. Although we could cover the wall with paint, I would suppose. But in any case, this is going to be a direct cost. The number that we are on at this point is the 528, 528. That's what we'll use there, 528, paint, wood stain, and fox finishing. So there we have that. And then we got the staff. Now this is not, don't get this confused with staff like labor. We're not doing labor because that would go under direct labor or overhead. This is staff, which they said was some kind of rock here. So this is materials. This is under materials. This is going to be the direct costs. And we are on, what are we on here? We're on 528. So let's pick that one, 528. And the name, it's not available. We already have 528. We're at 530. 530. All right, hopefully we added enough space within the account numbers. Hopefully you can see why it's, you got to kind of think about those account numbers to add the space that you need within them. So let's continue on. Looks like we do have enough space here. I'm going to go then to back to Excel. We got a couple more to add. The stucco, stucco is important. So we're going to add stucco. So let's go on back on over and we're going to add an account for the stucco. And that's going to be for, this is a direct costs. And then I think we're at 532. I can't see the accounts, but I'm pretty sure that's where we're at. My memory, my re-memory is not great, but I'm remembering that. And then we have the wood finishing. We're going to finish up with the wood finishing. The wood finishing will finish us up. So we're then going to add the account again, wood finishing. And this is going to be the account type of direct costs. And I think we're on, what are we on again? 534, I knew that. 534. 534 for the wood finishing will finish it up. So then we're going to say save and there we have it. So we've done this for the direct materials and now you can see we basically have, you know, the subcategories within the direct materials. This will help us to do some grouping information when we start to report this or see this on the financial statements. We did these subcategories for in essence, the direct materials, we could do a similar fashion or a similar function for the others, we will do so with the overhead. You can imagine also having direct labor broken out into different categories if you so choose. So we'll use these and this will make more sense, of course, as we start to post these accounts and create financial statements as well as projects with them. That's going to be it for now. Let's get out of here.