Payment for drop shipping supplier

[Jarett2]

Where do i put the payment i made to my supplier? for  my drop shipping business, My supplier is from china, they pick up my order then directly ship the product to my customer.

[MinhT1]

In your business, you're buying goods for resale.

If you are on a cash basis‌, your payment to your supplier in China should be categorized as Purchases.

Purchases is then used to calculate Cost of Goods Sold (COGS).

COGS = Beginning Inventory + Purchases - Ending inventory.

If all your purchases are drop-shipped to your customers, then both Beginning and Ending Inventories are equal to 0, and COGS = Purchases.