Which type of account is Cost of Goods Sold?
An expense account.
Cost of Goods Sold (COGS) is not a type of account, but rather a period expense account that represents the direct costs associated with producing or selling goods. COGS is typically classified as an operating expense and is reported on the income statement. The formula for COGS is beginning inventory plus purchases of goods during the period minus ending inventory, which gives the cost of the goods that were sold during the period. COGS is an important metric for businesses because it provides insight into the profitability of their products and helps them determine pricing strategies.
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