Cost of sales

What counts as cost of sales?

Cost of sales, sometimes perplexingly referred to as cost of goods sold, includes all the spending directly associated with the sales. A few examples should make this clear:

  • For wholesalers, retailers and other resellers, costs of sales is essentially the price paid to acquire the goods or services that will be resold.

  • For a software company, the cost of sales might be identified as of the cost of research and development directly associated with developing the product (if lifetime sales are expected to be 100 copies). Or cost of sales might be booked each month as of the cost of development, if the ...

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