Stocking items are items that are tracked in the inventory control system. Stocking items are normally physical products which can be uniquely identified and which have a defined cost. The on hand quantity of a stocking item is adjusted as inventory activity for the item occurs, and the cost of a stocking item is added to or subtracted from the inventory account in the accounting system when the item is bought, built, adjusted or sold. Stocking items are included in the inventory sub-ledger reports produced by the system. Typical stocking items include computers, monitors, valves, or other items that are physically identifiable and which have specific costs, but any item can be set up as a stocking item (including labor).
The cost of a stocking item comes from inventory (the cost of a stocking item is added to inventory report and the inventory account in the general ledger when it is received and it is removed from inventory on both the Inventory Valuation report and in the General ledger when a stocking item is sold). You cannot sell or use a stocking item unless it is available based on the inventory quantities for the item (you must have sufficient quantity of the item for the process you wish to perform).
When stocking items are received into the system, the system automatically posts the cost of the items to the inventory and inventory liability accounts in the general ledger, and it also creates unvouchered inventory (three way matching) records that are used when reconciling vendor accounts payable invoices to the associated inventory receiving activity.