Which item type would you use for a physical product you keep in stock?

• A. Inventory item
• B. Service item
• C. Non-inventory item
• D. Other

Answer: (A)

Tracking physical products you keep on hand requires an item type that records quantities and how costs flow through the books. An inventory item is the choice that enables you to track how many units you have, their purchase cost, and the sale price, and it automatically updates your inventory asset and cost of goods sold when you buy or sell the product. This supports accurate stock levels, cost tracking, and inventory reports, which is essential for physical goods kept in stock.

Service items cover labor or services rather than physical goods, so they don’t track stock. Non-inventory items can be sold without tracking on-hand quantity, which isn’t suitable for items you actually stock. Other is for items that don’t fit standard categories.