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The Complete Idiot's Guide® To Accounting by Lita Epstein, Shellie L. Moore

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Determining Sales Costs

You may think you don’t have any cost of sales if you are not selling products. This is not true. Even a service business has costs directly related to the services. For example, a marketing consulting firm may have to hire a market research firm in order to fulfill its contract. A law firm has court costs and may have investigator fees as part of its work for a client. The cost of sales accounts are in the 4000 number range of a computerized accounting system with the income accounts because they directly impact sales.
Here are the key accounts you’ll find that relate to the costs of goods you plan to sell:
Purchases (4300) This account is where you record the cost of goods that you intend to sell. This account is ...

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