What Are Cogs Account

Cost of goods sold (COGS) refers to the direct costs of producing the goods sold by a company. … It excludes indirect expenses, such as distribution costs and sales force costs. Cost of goods sold is also referred to as “cost of sales.”

Is COGS a GL account?

Cost of goods sold is usually the largest expense on the income statement of a company selling products or goods. Cost of Goods Sold is a general ledger account under the perpetual inventory system. … This account balance or this calculated amount will be matched with the sales amount on the income statement.

Is COGS an asset or liability?

Cost of goods sold is not an asset (what a business owns), nor is it a liability (what a business owes). It is an expense. Expenses is an account that contains the cost of doing business. Expenses is one of the five main accounts in accounting: assets, liabilities, expenses, equity and revenue.