The balance of the Cost of Goods Sold account at the end of the year represents:

Question

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The Cost of Goods Sold account represents the cost of inventory that was sold during the current year. It is an expense account that is used to record the cost of the goods that were sold, which will then be subtracted from the revenue earned from the sale of those goods to determine the company's gross profit. Option A is incorrect because inventory that was not sold is still recorded as inventory on the balance sheet, not in the Cost of Goods Sold account. Option B is incorrect because sales revenue is recorded in a separate account, not in the Cost of Goods Sold account.

The Balance of the Cost of Goods Sold Account at the End