cost of goods sold... which is an expense.... when you see FOB freight in/out is and then is added to purchases later on to calculate COGS
Which account is not classified as a selling expense?
COGS is expense account and all expenses has debit balance as default normal balance so COGS also has debit balance.
selling
selling expense.
If commission is paid on selling the product then it is selling expense .
selling expense
Selling expense or a part of SG&A
Which account is not classified as a selling expense?
Freight out is typically classified as a selling expense. It includes the cost of shipping goods to customers and is directly related to the sales process. Cost of goods sold, on the other hand, includes the direct production costs of goods sold, such as materials, labor, and overhead expenses.
Ask Ismail farhid
selling expense
COGS is expense account and all expenses has debit balance as default normal balance so COGS also has debit balance.
No. Freight charges are an expense item.
selling
selling expense.
ASC 330, Inventory, states shipping costs (read: freight out) do not contribute to bringing inventories to their present condition and location and as such should not be included in inventory costs. Because freight out is not considered a product cost, not only would you not capitalize freight out into inventory on the balance sheet, but you would also not record this cost as a COGS item, but rather a sales expense (SG&A). On the other hand, freight in is a purchase cost as it gets inventory to its current location (ie your warehouse), so that cost should be capitalized as inventory on your balance sheet which will later be recognized as a COGS item when you sell the related inventory.
Research and development costs are typically considered an operating expense and are included in SG&A (Selling, General, and Administrative) expenses rather than cost of goods sold (COGS). This is because R&D expenses are incurred to create future benefits, such as new products or improved processes, rather than to directly produce goods for sale.