Purpose of Accounts vs. Items in QuickBooks

When you are creating your Cost of Goods Sold accounts, consider using summary accounts, such as material, labor, and subcontract, and letting your Item List track more detail. For example, if you are a construction company and you have expenses for site work, concrete, framing, painting, and so on, rather than have a COGS account for each cost type, use the Item List. Select Lists > Item List to open the Item List dialog. Click Item > New and create an item for each cost type, assigning the Cost of Goods Sold account. Reports by item are available to break down the total of Cost of Goods Sold account into more detail.

From Laura Madeira’s QuickBooks Solutions Guide