You'll deal with inventory in the "Inventory/Cost of Goods Sold" section.
Beginning of Year (BOY) Inventory - What *you* paid for the inventory in your physical possession on Jan 1 of the tax year.
End of Year (EOY) Inventory - What *you* paid for the inventory in you physical possession on Dec 31 of the tax year.
Cost of Goods Sold (COGS) - What *you* paid for the inventory you actually sold in the tax year. It does not matter in what year you paid for that inventory.
Note that your BOY inventory *must* match the EOY inventory reported on your tax return of the previous year. If it does not, the IRS wants to know why.
Here's examples:
BOY - $0
EOY - $0
COGS - $5000
The above indicates you started the year with no inventory. THen you purchased $5K of inventory you sold in that same year, and ended the year with nothing in inventory.
BOY - $1000
EOY - $2000
COGS - $5000
The above indicates you started the year with $1K in inventory. Then you purchased an additional $6K of inventory. You sold $5K of inventory leaving you with an EOY inventory balance of $2K.
