Can I create a stock item that is the product of other stock items (raw materials)?

The stock system in Easy Books isn't able to manage stock products that you later combine into a new stock item to sell. It can manage stock that you buy and sell.

The best suggestion we have at the moment is to define the stock you sell as a service item instead. Technically it's not a service, but the difference is that Easy Books won't attempt to devalue the asset account when you sell a service product, whereas it will for stock sales.

For raw materials, it is best to create an asset account under "Other Assets & Liabilities" for these. When you purchase raw stock just add a transaction from your bank (or supplier) to this asset account. The asset value will increase so if you don't do anything about it it will be too high after you've sold your products. To manage this, you perform a stock-take and work out the total value of the asset account. Then just add a transaction as an adjustment from this asset account to the Cost Of Sales account, which you should find under the category "direct expenses". This correctly devalues your stock.

It is up to you when and how often you want to do a stocktake and add a transaction to re-value the assets. There is only one time you would really need to do it, and that's on the final day of your financial period. This will then give you the correct amount in your asset accounts and expense accounts. It's important these should be correct at the end of the financial year so that your Profit & Loss report takes the cost of selling the products into account. Without the adjustments the profit figure will be too high and will result in too high a tax bill.