About Changing an Item Category or Account Set
Fields and controls
Category Code
Enter a code of up to six characters to identify this category of inventory item. You can use letters and numbers in category codes.
Description
Enter a description for the category.
Options Tab
Allow Commissions
Select this option to allow commissions to be earned on the sale of items in the category.
If you do not select this option and specify a maximum commission rate, Order Entry will not record commissions for the sales of items that use the category.
You can select or clear the Allow Commissions option at any time.
Commission Rate %
If the Allow Commissions option is selected for this category, enter the commission rate (as a percentage of sales or margin) to be paid to a salesperson. This rate is used by Order Entry for commissions unless it is 0.0000. (If this rate is zero, Order Entry will use the salespersons' rates specified in the Salesperson Commission Rates screen in the Order Entry program.)
To determine sales commissions, if you choose the Track Commissions option on the O/E Options screen in Order Entry, the Order Entry program will:
- Base commissions on the sales or margin amount, depending on the choice in the Order Entry Options screen.
- Use the costing information in Inventory Control to determine margins for commission calculations.
- Use the rates specified for the item categories in Inventory Control unless the category commission rates in Inventory Control are zero.
- Use the salespersons' rates specified in the Salesperson Commission Rates screen if the commission rates in Inventory Control categories are zero.
Default Price List
Enter a price list code (or click 
and select the code) to assign to the category. Price list codes are set up on the I/C Price List Codes screen.
When you later add an item and select a category for the item, this price list code is included automatically, although you can override it.
Default Price List Description
Displays the description of the price list.
G/L Account
In this column of the table, enter the general ledger account (or click and select the account) to use for each of the following account types:
- Sales. A revenue account which Order Entry credits with the revenue from goods sold.
- Returns. A revenue contra account which Order Entry debits to record the reduction of revenue caused when previously sold goods are returned or credit notes are issued.
- Cost of Goods Sold. An expense account which Inventory Control automatically debits with the cost of goods sold, and credits with the cost of goods returned.
- Cost Variance. An expense account in which Inventory Control records the cost variance between the actual cost and either the standard cost (for items using the standard costing method) or the most recent cost (for items using the most recent costing method) of inventory items sold.
- Damaged Goods. A revenue contra account that is debited instead of Sales Returns whenever goods are returned as damaged in Order Entry.
- Internal Usage. The default expense or asset account that is debited when an item in this category is used internally. You can override this account when you enter transactions.
Inactive (as of)
Select this option if you do not want to assign this category to any inventory items.
If you make a category inactive, you can no longer assign it to items. You also cannot save changes to items that use the inactive category; you must assign the items to an active category before you can save them.
Normally, you use this option when you decide to delete a category and want to ensure that inventory items are not assigned to it.
You can change the option from inactive to active at any time.
Last Maintained
Displays the date the last change was made to the category.
Taxes Tab
This table displays the tax authorities and tax classes associated with this category. Click Add Line to add a line to the table.
Purchase Tax Class
Enter the tax class number (or click and select the number). This tax class is used for purchases for the selected tax
authority. (You can override this purchase tax class for items you assign
to this category.)
Purchase Tax Class Description
Displays the description of the tax class. (Tax classes and their descriptions are set up on the Tax Classes screen; open Banking and Tax > Tax Services > Tax Classes.)
Sales Tax Class
Enter the tax class number (or click and select the number). This tax class is used
for sales for the selected tax authority. (You
can override this sales tax class for items you assign to this category.)
Sales Tax Class Description
Displays the description of the tax class. (Tax classes and their descriptions are set up on the Tax Classes screen; open Banking and Tax > Tax Services > Tax Classes.)
Tax Authority
Enter the taxing authority (or click and select the tax authority) to assign to
the category. (Tax authorities are set up on the Tax Authorities screen;
open Banking and Tax > Tax Services > Tax Authorities.)
Overview
You use the I/C Categories screen to set up categories for grouping inventory items. For example, you can use categories to:
- Classify items into logical groups for reporting purposes.
- Allocate the sales, returns, cost of goods sold, cost variance, and damaged goods amounts for different kinds of items to different sets of general ledger accounts.
Note: You must add at least one category to Inventory Control before you can add item records.
Options Tab
Use the Options tab on the Categories screen to:
- Assign a default price list for items that you add to each category.
- Specify whether your sales staff earns commissions on sales in the category, and enter the maximum commission rate for the category.
- Enter the numbers of the general ledger sales, returns, cost of goods sold, cost variance, damaged goods, and internal usage accounts for which to create journal entries from transactions for items in the category.
Taxes Tab
The Taxes tab appears on your screen only if you have activated Tax Services for your Inventory Control company.
Use the fields on this tab to specify the tax authorities and associated sales and purchase tax classes that apply to items in the category.