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Convert item from inventory item to expense

edited Jun 14, 2013 2:00PM in Accounting / ERP 2 comments

From time to time we take items out of our inventory to use in our shop for production - products like cans of lubricant or tubes of sealant. When this happens we do an inventory transfer to take the items out of stock.

The problem is that this doesn't cover the entirety of what's happening. If the item was not something that we stocked (kept on hand for sale to customers) and had to be ordered for use in our shop then the item would be purchased and expensed to a "Shop Supplies" expense account.

How do I both: a) transfer the item out of stock and b) hit my shop supplies expense account for the cost of the item?

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