Cost of Goods Sold
Nearly all income tax systems allow a deduction for cost of goods sold. This may be considered an expense, a reduction of gross income, or merely a component utilized in computing net profits. The manner in which cost of goods sold is determined has several inherent complexities, including various accounting methods. These include:
- Conventions for assigning costs to particular goods sold where specific identification is infeasible.
- Methods for attributing common costs, such as factory burden, to particular goods.
- Methods for determining when costs are recognized in computing cost of goods sold or to be sold.
- Methods for recognizing costs of goods that will not be sold or have declined in value.
Read more about this topic: Tax Deduction, Business Expenses
Famous quotes containing the words cost of, cost, goods and/or sold:
“One must always be aware, to notice—even though the cost of noticing is to become responsible.”
—Thylias Moss, African American poet. As quoted in the Wall Street Journal (May 12, 1994)
“Every new stroke of civilization has cost the lives of countless brave men, who have fallen defeated by the “dragon,” in their efforts to win the apples of the Hesperides, or the fleece of gold. Fallen in their efforts to overcome the old, half sordid savagery of the lower stages of creation, and win the next stage.”
—D.H. (David Herbert)
“This avidity alone, of acquiring goods and possessions for ourselves and our nearest friends, is insatiable, perpetual, universal, and directly destructive of society.”
—David Hume (1711–1776)
“Then he told the news media
the strange details of his death
and they hammered him up in the marketplace
and sold him and sold him and sold him.
My death the same.”
—Anne Sexton (1928–1974)