To setup your Non Inventory Items in QuickBooks (QB)

1. Go to List>Item List>right click and New.

2. For "Type" this is up to you.  Unless you are setting up Inventory Items, choose another Type.  I always use Service because on reports that use Items, the Items are grouped by Type.  This way all of your Non Inventory Items will be grouped together alphabetically.

3. Enter a name that is descriptive for this Item.

4. Check the box that says "this service is used in assemblies....." a box will then be available so you can choose an expense account or Cost of Goods Sold.

5. On the lower right is a drop down to choose an income account.

6. This is what is called a "2 sided Item".  You can now use this Item when entering expenses and the expense will post to the Expense or Cost of Goods Sold account that you entered for the Item and you can use this Item for Income and it will post to the Income account that you have chosen.