Scenario
This article shows the GL Impact of Drop Ship Items on Transactions
Solution
1. On Cash Sale/Invoice:
Debit: Cash or Accounts Receivable
Credit: Sales
2. On Vendor Bill:
Debit: Cost of Goods Sold
Credit: Accounts Payable
Note: There is no effect on the Inventory Asset Account. Furthermore, Item Receipt/Fulfillment has no GL impact for drop ship transactions.