I think you're both saying the same thing... when you buy new inventory, the entries are: (subtract cash) (add to inventory assets) This is not an expense yet

I think you're both saying the same thing... when you buy new inventory, the entries are: (subtract cash) (add to inventory assets) This is not an expense yet. Then later when you sell it: (subtract inventory) (add to cogs) COGS is an expense account. Since an income statement doesn't show assets, it wouldn't appear on the income statement until it becomes a COGS expense.