When an order is invoiced, the transaction credits the appropriate Income account. If the Generate Cost of Goods Sold option is enabled on the Inventory System Setup window, the transaction also credits the Inventory account and debits the Cost of Goods Sold account. However, which accounts actually are affected by a transaction depend on product account hierarchy.
Note: Orders does not look to AR/Cash for an Income account. If an Income account is not defined within the product's account hierarchy, then no Income account exists, and no Income account will be credited when an order for the product is invoiced.
Factors determining a product's account hierarchy
■ Product Type - Is a product a stock item, non-stock item, or product kit?
■ Inventory Method - Is standard product inventory used, or are products stored in multiple warehouses?
■ Account Data - Accounts can be defined for products on the following windows:
□ Warehouses window - Multi-Warehouses only - (from Orders, select Manage inventory > Manage products, select from Current Products, and click Warehouses)
□ Accounting window (from Orders, select Manage inventory > Manage products, select from Current Products, and click Accounting)
□ Set up product categories window (from Orders, select Set up tables > Product categories)
□ Inventory System Setup window (from Orders, select Set up module, and click Inventory)