Is the cost of goods sold an expense?
While we often think of expenses as salaries, advertising, rent, interest, and so on, the cost of goods sold is also an expense. The cost of goods that were sold needs to be matched with the pertinent sales on the income statement, just as commission expense must be matched with sales or other revenues.
The FASB’s Statement of Financial Accounting Concepts No. 6, Elements of Financial Statements, paragraph 81, states that “…expenses themselves are in many forms and are called by various names—for example, cost of goods sold, cost of services provided, depreciation….” You can find the concepts statements at www.FASB.org/st.
Learn more about the Cost of Goods Sold.
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QUE: What is mean of “Cr and Dr”?
QUE: What is mean of “cost of prodution and production of cost”?
Hi,
I was wondering if you have an answer to this question:
where would you show commission expense generated from sales made by technicians who install systems at customer sites? their normal salary and all other costs are shown as part of cogs.
thank you.
i should clarify my questions more:
when I asked “where”, I was referring to which segment of the P&L, “COGS” or “Selling”?
Thank you.
MCQs question