How do you create a new product or service item and assign it to an income account?

• A. Sales > Products and Services > New; select Service or Inventory; choose an Income account; Save.
• B. Inventory > Items > Create; link to Income account; Save.
• C. Sales > Items > New; pick Inventory; assign Expense account.
• D. Accounting > Chart of Accounts > New; designate Income account.

Answer: (A)

The key idea is that an item you sell must be mapped to a revenue (income) account so sales posts go to the correct place in your chart of accounts and your reports reflect real revenue. To create a new product or service item and assign its income account in QuickBooks Online, go to Sales, then Products and Services, and click New. Choose the item type that matches what you’re selling (Service for a service offering or Inventory for a physical product). Enter the item details you need, and in the Income account field select the appropriate revenue account (for example, Sales Revenue or a specific Services Income account). Save the item. This linkage ensures that when you sell the item, the transaction records revenue in the chosen income account.

Other paths aren’t correct for item creation: creating items under Inventory > Items or similar isn’t how QuickBooks Online structures item creation, and you’d miss the proper place to map to revenue. Assigning an Expense account would misclassify revenue as a cost, which is incorrect. Finally, creating accounts via the Chart of Accounts is about setting up the revenue account itself, not about defining the item that will post to that account.