When the products are shipped to customers, the cost of manufacturing those products becomes Cost of Goods Sold (COGS)shown on the company's balance sheet.

Question

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Cost of Goods Sold (COGS) is reported on the company's income statement, not the balance sheet. The balance sheet shows assets, liabilities, and equity, while the income statement reports revenue, expenses, and profit, including COGS.

When the Products Are Shipped to Customers, the Cost of Manufacturing