is the cost of sales a asset, expense, liability or income?
Answers
511 points
songcon answered one month ago …
Technically, it's a cost to match with the income from sale to get the capital or trading gain or loss. This is a separate line for this on the income statement for the business.
Expense normally is used for operating or daily expense such as office expense, repairs & maintenance, salary, supplies etc . . .
511 points
songcon answered 3 weeks ago …
Sorry, I misread as the cost of the asset that was sold
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songcon answered 3 weeks ago …
I don't know why I changed the answer. Cost of sales of business inventory (merchandise) is sale expense, but cost of sale "an asset", which mean an item that is used for business, not an inventory or items for daily business sales.
The cost of sale an asset should be used to match with the capital sale, it's not an operating item
