Key Difference – Cost of Sales vs Cost of Goods Sold
Cost of sales and cost of goods sold are two terms that are often used interchangeably. Both cost of sales and cost of goods sold records the cost incurred to produce goods, to purchase goods, to sell to the end customer or to offer a service. Both these amounts are reported in the收入证明following sales revenue. The key difference between cost of sales and cost of goods sold is that c出售商品的OST是免税的，而销售成本不是。
What is Cost of Sales
Cost of Sales is the term used to record the direct costs associated with offering a service; thus, this is recorded in service related organizations which do not offer a physical product as their main stream operation. Since service-only businesses cannot directly relate any operating expenses to something tangible, they cannot list any cost of goods sold on their income statements. Without any cost of goods sold on their income statements, they cannot claim any cost of goods sold deductions.
E.g: In a hospital, the direct cost incurred for labor, medical supplies and equipment to provide direct patient care is classified as cost of sales.
What is Cost of Goods Sold
The term cost of goods sold is applicable to manufacturing organizations that have stocks of physical products. Cost of goods sold is calculated using the below formula.
商品成本= Beginning Inventory + Purchases – Ending Inventory
Unlike for cost of sales, a tax reduction is available for cost of goods sold, to compensate for a portion of expenses incurred. This is allowed by the Internal Revenue Service (IRS), the tax authority. IRS Publication 334: Tax Guide for Small Businesses and IRS Publication 550 provides more details regarding the same.
Expenses that are Tax Deductible for Cost of Goods Sold
- Raw materials
未加工的资源,将挂rted into finished goods
Costs of storing and moving raw materials and finished goods in and out of the production floor
- Shipping costs
- Direct labor costs
Wages and salaries cost to workers who are involved with processing the products.
Indirect costs and all other manufacturing support costs
What is the difference between Cost of Sales and Cost of Goods Sold?
Cost of Sales vs Cost of Goods Sold
|Cost of Sales is not tax deductible
|Service organizations record Cost of Sales to account for direct costs related to delivering a service.
摘要 - 销售成本与出售商品成本
Generally accepted accounting principles do not provide any detailed guidelines on cost of goods sold or cost of sales, which is one of the reasons why the two terms are lumped together so frequently. The difference between cost of sales and cost of goods sold can be identified by the product or service offering. For both cost of goods sold and cost of sales, the companies should be careful only to include direct expenses with regard to either the product or service.
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