Each product or service is first assigned a category then further defined by the unit of measurement, type, and tax.
Product or service types are broken down into the following types:
Assembled – A product sold (parent) from the grouping of other products or components (child). Inventory tracking is available only on the components. No inventory is tracked at the parent level. When processing a sale, the parent product is credited to sales in the profit and loss and the components (child) are transferred to the profit and loss from the balance sheet.
Manufactured – A product sold (parent) from the grouping of other products or components (child) to make finish product which is on the balance sheet waiting to be sold.
Purchased – Products bought from a third-party vendor for resale.
Wage / Labor – Service cost of a third-party vendor using the same measurement basis as to how sold.
Dummy – Products or Service sold with no inventory movement tracked.