Is cost of goods sold a current asset?

Question

0

Kile 0 Comments

What is the cost of of goods sold? Is it a balance sheet item or an income statement item and is it included as a current asset on the balance sheet?

1 Answer

score 0 · Answer 1 · 2012-12-02T19:18:29+00:00

No cost of goods sold are expenses and are reported in the income statement and not in the balance sheet where the current assets are.

The connection of the current assets and the cost of goods sold is the closing stock (the inventory). To be more specific the cost of goods sold equal the opening stock plus the purchases for the year less the closing stock. The closing stock is included in the assets as inventory.