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:
“The cost of a thing is the amount of what I will call life which is required to be exchanged for it, immediately or in the long run.”
—Henry David Thoreau (1817–1862)
“It breedeth no small offence and scandal to see and consider upon the one part the curiosity and cost bestowed by all sorts of men upon their private houses; and on the other part the unclean and negligent order and spare keeping of the houses of prayer by permitting open decays and ruins of coverings of walls and windows, and by appointing unmeet and unseemly tables with foul cloths for the communion of the sacrament.”
—Elizabeth I (1533–1603)
“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)
“As for the virtuous poor, one can pity them, of course, but one cannot possibly admire them. They have made private terms with the enemy, and sold their birthright for very bad pottage. They must also be extraordinarily stupid.”
—Oscar Wilde (1854–1900)