ECONOMICS

Detailed explanation-1: -Is cost of goods sold a debit or credit? The COGS account is an expense account on the income statement, and it is increased by debits and decreased by credits.

Detailed explanation-2: -The Difference Between Inventory and Cost of Goods Sold Inventory includes all of the raw materials, work-in-progress, and finished goods that a company has on hand. COGS only includes the direct costs associated with the production of the goods that were sold.

Detailed explanation-3: -Inventory (asset account: normally a debit balance) Fixed assets (asset account: normally a debit balance) Accounts payable (liability account: normally a credit balance)

Detailed explanation-4: -Cost of goods sold is an expense account with a normal debit balance. It is a temporary account and is closed out during the closing process. Cost of goods sold is credited to bring the balance down to zero and income summary is debited. Income summary is a temporary account that is used during the closing process.