Cost of Goods Sold
Cost of goods sold is the carrying amount of inventory recognized as expense when the related goods are sold.
Expense-category terms used to distinguish product costs, revenue costs, operating expenses, and trade expenses.
This section explains where operating costs appear after a business buys, produces, delivers, and sells its output. The boundary matters because it determines gross profit, operating margin, inventory value, and the comparability of financial statements.
Start with Cost of Goods Sold for the inventory cost recognized when goods are sold. Use Operating Expenditure for costs consumed in ordinary operations rather than recorded as inventory or another long-lived asset.
The labels are not interchangeable. Cost of revenue can be broader than inventory COGS, while depreciation, labor, hosting, support, and occupancy can appear in different functions according to their use and the applicable reporting framework. Compare accounting policies and note disclosures before comparing margins across companies.
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Cost of goods sold is the carrying amount of inventory recognized as expense when the related goods are sold.
Operating expenditure is spending consumed in ordinary operations rather than recorded as inventory or another long-lived asset.