(Increase in Inventory (v2040.01))
This account on the Balance Sheet represents:
For manufacturing firms: the total of Raw Materials, Work in Progress, and Finished Goods, recorded at the lower of cost or market value. (Or, using the Financial Accounts view, you can set up subaccounts for each category.)
For non-manufacturing firms: total purchases
By entering the Increase in Inventory (v2040.01) as a Percent of Change in Sales (v1000), the default forecast method, you can account for the fact that additional investments in working capital usually are necessary to support sales growth. If you prefer, select the alternative forecast method, Turns, and enter your forecast data as an inventory turnover rate. Or select the Days forecast method and enter the number of inventory days. In both cases, specify the Associated Account as Cost of Goods Sold (v1040), or a subaccount of this account denoting goods purchased.