The cost of goods sold decreases the balance in the Finished Goods Inventory account.

Question

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The cost of goods sold is the cost incurred by a company to produce and sell its products. This cost includes the direct cost of materials and labor used in the production process, as well as indirect costs such as overhead expenses. When the goods are sold, the cost of goods sold is recorded as an expense, which reduces the balance in the inventory account. Therefore, the cost of goods sold decreases the balance in the Finished Goods Inventory account.

The Cost of Goods Sold Decreases the Balance in the Finished