 for it. We're going to we're not going to add different categories, although we could by this point add categories by like vendor maybe we might say these are the Gibson guitars or maybe these are the electric versus the acoustic or something but we're not doing that right now quantity on hand is zero because we're just purchasing them you never want to put anything usually in this here unless it's the first time you're starting the business but they make you put something there so I'm just going to put it zero as of the beginning of the period reorder point I'm not going to put one or I can just put zero on the reorder point when it gets down to zero you can start giving me warnings and stuff inventory asset that's the account that will be going up when we buy the inventory not with the purchase order because we don't get the inventory yet but with the bill form or check form or expense form and then it will go down when we sell the inventory with a sales form or invoice form the description we want it's going to be I'm going to call it a Gibson SG and again I'm not an expert on the guitars and the prices we're just making it up here people so what there it is we're going to say the rate is going to be we're going to say we sell them for five ninety eight and we don't actually sell these so like if you're trying to if you if you're thinking you want to request a guitar because that's like a good price for them or something I have no we just made it up all right we just made it up but we're going to say this is the income account it's going into the sale of product income that's going to be on the income statement when we sell them with the use of an invoice or sales form and then on the purchase side of things when we buy the things I'm going to say it's the same description that will show up on the purchase order the bill the expense form or the check form whatever we use to purchase it well let me switch these I'm going to I'm going to say that we purchase them for that five ninety eight and then we're going to sell them for we're going to say seven seven seven okay so now you don't want it anymore is that it not because I raised the sales price but in case we're going to say that's how we'll do it and then the cost to goods sold that's the account that will be impacted on the expense side of things actually will be recorded when we record a sales form invoice or sales receipt the sales form reporting both the income side income account and the cost meaning the cost of goods sold and then we could add a preferred vendor which was Gibson I believe so we could put the preferred vendor if there if we so choose as well and boom we have created on the fly as we go during the data input of the purchase order a new inventory item impressive very impressive let's put 10 of those we're going to say we get 10 of those and once again we're going to say that some we have a customer that wants those particular guitars that's why we set it up so we're going to say it's called music this is our customer name stuff store I know it's a horrible name our creativity is waning at the moment so bear with us that's what we call it so there it is once again nothing will be recorded with it this is an internal transaction so let's save it and close it this time selecting the drop down which is actually a rise up because it's on top instead of below and we'll save and close it save it and close it and then once again we can track this information in the expenses on the left hand side possibly in the expenses area where we can filter by the purchase order now we've got our list of purchase orders and then we can we can filter by the purchase orders right I can use my filtering option and I can look at the status we're looking at all the purchase orders they're all open right now so obviously if I say open purchase orders they're all there if I was to change them to closed purchase orders those that we have created a bill with or that we have received inventory for obviously nothing is there for those ones let's go back to the all transactions now let's go back to the contractors and not the contractors the vendors and now we've got five people that we purchase stuff from and there is our open purchase orders we've got two for the diamond or one for diamond head epiphone two and Gibson two and the next thing we expect to be happening we get that box of guitars we hope we hope that no one takes them before we get our hands on them because our we need to we're trying to feed we're trying to put some food on the table here for crying out loud how can we put some food on the table to steal our inventory before okay so but then we'll have it and there'll be a bill inside of it and then we'll enter the bill into the system which we can populate from the purchase order and if there was a customer on the purchase order we can finally turn around and try to make some money for crying out loud by issuing a sales receipt form and an invoice because we purchased those guitars specifically for a customer no impact on the financial statements for the purchase order as we mentioned therefore the trial balance if you were on last time then it will be the same this time and we should be good to go forward to next time