A drop ship cost of goods sold account is a cost of goods sold general ledger account that is posted to when an invoice is posted. During accounts receivable invoice processing, the general ledger posting would normally be:
Drop Ship In Transit CR $100
Drop Ship Cost of Good Sold DR $100
If your products use standard costing, any variance between the standard cost and the drop ship cost goes into the standard cost variance general ledger account.
Purchasing Control Maintenance allows you to select the account resolution hierarchy for drop ship cost of goods sold accounts from these three areas:
Product - A partial account (account mask) or an entire general ledger account can be assigned at the product level in Product Maintenance.
Location - A partial account (account mask) or an entire general ledger account can be assigned at the location level in Location Maintenance.
PO Class - A partial account (account mask) or an entire general ledger account can be assigned for a drop ship type purchase order class in Purchase Class Maintenance.