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Understanding Work Orders and Drop Ships

in Ask A Guru 3 comments

We are analyzing our income statement and are wanting to understand the back end of some of the processes.

When a work order is created from a sales order, why is it hitting the COGS account as soon as it is built? I thought it should only hit the COGS account with the build is fulfilled? Why does building the assembly not go into inventory?

We are noticing there is a different process when a dropship PO is created. It seems as if it bypasses the inventory account. Also, why does it automatically hit COGS when "shipped" is selected?

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