In your opinion, What account type is the cost of sales account?

My answer is EXPENSE.....................................

My answer is5. Expense.

 

Cost of sales is an expense account. It is incurred when goods have been sold.

Cost of sold is considered as an expense in accounting .

Option5 "Expense" is the right answer.

5. Expense........................

The Option5) is correct Expense  

Expense is the right answer

Cost of goods sold is considered an expense in accounting and it can be found on a financial report called an income statement.

Cost of goods sold = opening inventory + purchases - closing inventory. And it is considered as a expense account

COST OF SALES IS AN EXPENSE ACCOUNT

The cost of sales account is not considered an account type in the traditional accounting classification. Instead, it falls under the broader category of expense accounts. In the chart of accounts, accounts are typically categorized into several types, including: Assets: Resources owned by the company, such as cash, accounts receivable, inventory, and property. Liabilities: Obligations owed by the company, such as accounts payable, loans, and accrued expenses. Equity: Represents the owners' stake in the company, including common stock, retained earnings, and additional paid-in capital. Income or Revenue: Accounts related to the company's revenue generation, like sales revenue, service revenue, or interest income. Expenses: Accounts that track the costs incurred in running the business, such as cost of sales, salaries and wages, utilities, etc. The cost of sales account, as mentioned earlier, is an expense account, representing the direct costs of producing or purchasing goods that a company sells. It is an essential component in determining a company's gross profit and overall profitability.