ConnectStock uses FIFO, which means "first in, first out". The units you bought first are the ones counted as sold first. This decides the cost on every sale.
How it works
Bills and adjustments: When you add a bill or an adjustment, ConnectStock records what those units cost.
Sales: Each sale uses the cost of your oldest units still in stock.
Refunds: A returned unit comes back with the same cost it had when it sold.
Amazon reimbursements and adjustments: If they're linked to an order, they use that order's cost.
Example
Bill 1: you buy units at $1 each.
Order 1: you sell them. Cost: $1 each.
Bill 2: you buy more at $2 each.
Order 2: you sell them. Cost: $2 each.
A unit from Order 1 is refunded. It comes back at $1.
Next order: that $1 unit is the oldest one in stock, so it's used first.
When there's no order to go by
Some refunds and reimbursements aren't linked to an order. Then ConnectStock uses the first of these it can find:
The cost of the last unit that sold before the refund.
The cost on your last bill before the refund.
The item's default cost.
$0, if none of the above exist.
Frequently asked questions
Why does a refund show $0 cost?
It wasn't linked to an order, and the item had no earlier sales, no bills, and no default cost. Add a default cost to the item, or add the bill.
Where do I set an item's default cost?
Open the item in ConnectStock, click Edit, fill in Item Cost, and click Save.
What if an item goes below zero?
See "Which cost is used on P&L reports when an item goes negative in ConnectStock?".