You could remove your G/L entry by reversing it, then go back to the vendor invoice and adjust it, changing the G/L account.

That would be the clearest audit trail.

What the help perhaps means, is that you can't apply sales taxes to an exempt item, so you need to choose an item that isn't exempt.

Thanks for the reply RandyW.  I did reverse the transaction.

By doing it the way you suggest, problem is, when I go into purchase invoice, select the vendor and the product (which I created in inventory), the account assigned is 1520 (Inventory A) and I can't overide it.

If I forgo entering the product SKU but, enter a description matching and item created in inventory, SAGE automatically matches the description to the SKU and the same thing happens again.

Mind you, I could just enter a general description as this allows me to select which account to allocate the product to.

Is this what you had in mind?

It's not how Sage 50 was designed, but you can use your inventory list as a sort of Fixed Asset list, by using multiple Inventory G/L Asset accounts.

You could (in Single User Mode) reverse the invoice altogether, leave the Purchase Order as cleared, open the Inventory item and change the Asset account linking to the desired G/L account, and then re-enter the invoice (and it will automatically record it to the correct G/L account).

Or, you could leave everything as it is, and use an Inventory Adjustment to take the item and it's cost out of Inventory, and over-ride the Adjustment column to be the appropriate Asset G/L account.

(Sage 50 doesn't specifically have a 'Fixed Assets' list as QuickBooks does, but there's really no functional difference in how a purchase is recorded for an Inventory Item versus a Fixed Asset item.)  

I found a product brochure for something called Sage 50 Fixed Assets, however I wasn't able to find out it's cost or whether it would work with Sage 50 accounting software.  This is on the U.S. website:

http://na.sage.com/us/sage-50-accounting/download/2014/fas

So I just hacked it into the Inventory List.  There's no need to pay Sage anything, especially since they don't seem interested enough to make a Canadian product.  You could also use one of the Excel or Microsoft Access templates to track your Fixed Assets.

I see. Thank-you RandyW.