Cost of merchandise sold is often the largest expense on a merchandising company income statement.

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Cost of merchandise sold (also known as cost of goods sold) represents the cost of the goods that a company has sold during a specified period. For a merchandising company, this expense is typically the largest as it directly relates to the products they sell. Other expenses such as rent, wages, and advertising may also be significant, but they do not directly affect the cost of goods sold.

Cost of Merchandise Sold Is Often the Largest Expense on a Merchandising