For those who want to have a deeper understanding on this topic, please have a look at this video which demonstrates how purchase and sales sales transactions are reflected in the financial journals in detail. Situations like product returns from customers and suppliers are also covered.

https://www.youtube.com/watch?v=9uqCeRpNIy0 

Important to understand is the difference between the various accounts which can be configured on the product category and product levels:

ACCOUNT PROPERTIES

• Income Account: Registers revenue from sales. CoA example account: 400000 Product Sales
• Expense Account: Registers costs of goods sold. CoA example account: 500000 Cost of Goods Sold

ACCOUNT STOCK PROPERTIES

• Stock Valuation Account: Registers the cost of good. CoA example account: 110107 Stock Valuation Product Category A
• Stock Input Account: Registers incoming deliveries (@cost of good) by debiting this account. Once payment is made for the delivery to the creditor, the Stock Valuation Account is debited (added) and this account is credited (substracted) to balance the account. CoA example account: 110207 Stock Interim Product Category A (Received)
• Stock Output Account: Registers outgoing deliveries (@cost of good) by crediting this account. Once payment is received from the debtor for the delivery, the Stock Valuation Account is credited (substracted) and this account is debited (added) to balance the account. CoA example account: 110307 Stock Interim Product Category A (Delivered)