What is COGS / Cost of Goods Sold?



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Why the name COGS(cost of good sold)?the company is investing money for buying/purchasing items which are needed for company? So, in a way it should be cost of good purchased.

2 Answer(s)


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Good question!
It is called "Cost of Goods Sold" because these products are bought in order to make the goods that are SOLD to make revenue.
For example cheese is bought by dominos, to make pizza that is SOLD. Hence cheese is the COST of the GOODS (pizza) SOLD

Hope that is clear.

0

Good question!
It is called "Cost of Goods Sold" because these products are bought in order to make the goods that are SOLD to make revenue.
For example cheese is bought by dominos, to make pizza that is SOLD. Hence cheese is the COST of the GOODS (pizza) SOLD

Hope that is clear.

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