Do you deliver the products you sell directly to the Customer? Yes/No
If No, -> Drop ship (if you never stock it it can be a non-stock item, if you stock it sometimes it should be a stock item).
If Yes, do you purchase goods as finished goods? Yes/No
If Yes = Stock Items
If No = Assemblies - Use assemblies if there's an explicit build process - ie. you gather some parts together and perform some assembly action.
Assembly Items can contain sub assembly items in their BOM.
Assembly Items behave as stock items.
Average cost of an assembly item is calculated from the average cost of the BOM components AT THE TIME THEY ARE BUILT.
Do you sell your products in bundles? Yes/No.
If Yes = Kits - Use kits if you sell a ‘bundle’ of items. These appear on Sales Documents as one line item but CAN be edited on the fly. Assemblies of course cannot.
Items are added to Line Item tables on Sales and Purchasing Documents to represent products, services, and calculations.
Items are the foundation of inventory management and transaction accounting.
When Posting Documents i.e. Sales or Purchase Invoices are saved, Items post balances to the appropriate accounts of the General Ledger. Which accounts balances are posted (debited and credited) to is preset on the Accounting tab of the Item Master (Item type>Accounting tab)
After a posting Document is saved you can view the debits and credits using the Action>Show Account Entries.