Which of the following statements about cost of goods sold is correct?
A) For a manufacturer it is a measure of the cost of raw materials and supplies used for producing item for sale.
B) Retailers do not have a cost of goods sold on their net income statements
C) When you subtract the cost of goods sold from net sales, the result is net profit
D) All of these statements are correct.

Question

Quizplus · Accepted Answer

Cost of goods sold is the cost of materials and supplies used by a manufacturer to produce goods for sale. Retailers also have a cost of goods sold on their net income statements, as it represents the cost of goods purchased for resale. When you subtract the cost of goods sold from net sales, the result is gross profit, not net profit.

Which of the Following Statements About Cost of Goods Sold