Which item type is used for services your company provides to customers?

• A. Inventory parts
• B. Service items
• C. Non-inventory parts
• D. Inventory assembly

Answer: (B)

When you sell a service rather than a physical product, you want an item type that represents labor or professional work. A service item is designed for this: it records the service revenue to an income account, is used on estimates and invoices to bill customers for what you performed, and it does not affect inventory levels. Inventory parts and inventory assemblies are for physical goods you stock and may build, which would push quantities on hand and inventory tracking. Non-inventory parts are tangible items you sell without tracking inventory, but they still represent goods, not services. Since the scenario is about services your company provides, the service item is the correct choice.