Cost of goods sold:
A) Is another term for revenue.
B) Is another term for merchandise sales.
C) Is also called gross margin.
D) Is a term only used by service firms.
E) Is the term used for the expense of buying and preparing merchandise for sale.

Question

Quizplus · Accepted Answer

Cost of goods sold is the term used for the expense of buying and preparing merchandise for sale. It is not another term for revenue or merchandise sales. Gross margin is a related term, but it is not interchangeable with cost of goods sold. Service firms may not have a cost of goods sold in the traditional sense, but they may have similar expenses related to their specific services.

Cost of Goods Sold