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, 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)
“Give up the feeling of responsibility, let go your hold, resign the care of your destiny to higher powers, be genuinely indifferent as to what becomes of it all and you will find not only that you gain a perfect inward relief, but often also, in addition, the particular goods you sincerely thought you were renouncing.”
—William James (1842–1910)
“A product of the untalented, sold by the unprincipled to the utterly bewildered.”
—Al Capp (1909–1979)