About Internal Usage Transactions

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When you use an inventory item in your own business, you record the removal of the item from inventory by processing an internal usage transaction.

Example:

You remove items from inventory to stock the store's washroom.
An office supply company uses a desk from inventory for its own office.

Internal Usage Transactions

Typically, when you sell inventory items, you credit the inventory account by the cost of the items sold, and you debit the cost of goods sold account.

When you record an internal usage transaction, you still credit the inventory account by the cost of the items, and you either debit an expense account or an asset account, depending on the type or value of the item.

For instructions on entering Internal Usage transactions, see Using Goods Internally.