The inventory is the supplies that you've bought that are still lying around. So, for example, you start your business in 2023 and have 8 jars of paint already. Then you buy 20 jars of paint during the year (those 20 are your supplies expense). You've painted all year so at the end of the year you had 5 jars of paint. It looks like this
Beginning inventory - 8
Purchases - 20
Ending Inventory - 5
Cost of goods sold - 23
Now, in reality, you need to enter the cost of all those supplies in instead of numbers like that, but otherwise it's all of those. And since you purchased the supplies that you had when you started the art business before this year it is a good idea to add them to your starting inventory.
@guinmurtaxes
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