User Guide

Lesson VII—Inventory
Tracking Inventory Items
149
12 Move to the Cost Method field.
Peachtree Accounting offers three costing methods to track your stock
and assembly items in inventory:
• Average Cost
• Last In First Out (LIFO)
• First In First Out (FIFO).
Always select the same method for each item in your inventory. Check
with your accountant about the implications of changing this method. It
should only be changed at the beginning of the fiscal year. For more
information about costing methods, refer to the “Inventory” chapter of
the User’s Guide.
Our sample company uses the FIFO cost method for all its stock and
assembly items.
13 Move to the Last Unit Cost field. Type .55 and press e. The cursor
moves to the Item Tax Type field.
The Last Unit Cost field is used for entering the cost of new inventory
items in case you sell an item before there is a purchase, payment, or
adjustment to base the real cost on. Once you enter a purchase, payment,
or beginning balance, the item cost is calculated by Peachtree
Accounting’s costing system (depending on your costing method).
In the Item Tax Type lookup box, you specify whether or not the item is
subject to sales tax. You might also set up specific taxes for items that
have special exemptions. An explanation of these exemptions is required
by some states.
14 Type 1 (the code for a Regular taxable item) and press e twice, skipping
the Subject to Commission field. The cursor moves to the Minimum Stock
level field.
This records the minimum quantity on hand of the stock item you can
reach before you need to reorder the item. Also, you can set your global
options and action item alerts to warn if you fall below the minimum
stock level. If you include a minimum stock level, you can effectively use
the Inventory Reorder Worksheet in reports when you are ready to make
inventory purchases.
15 Type 6 and press e to move to the Reorder Quantity field.
This records the minimum number of items you can reorder at one time
(for example, the number of items in a case).