Is There Any Difference Between Cost of Goods Sold And Cost of Sales

No, there is no difference between Cost of Goods Sold and cost of sales. In fact, both these two accounting terms used interchangeably as goods sold are called sales. So one may replace the words “Goods Sold” and replace it with Sales.

Cost of sales includes not only all the costs incurred in order to produce or manufacture a complete product but also it is incurred in order to sale a product or finished goods to sold to end customers. Examples are Purchases, Distribution Costs, Packaging Costs, Selling Costs etc.

Cost of Goods Sold is calculated for trading concerns which deals with finished products that is ultimately sold to customers in the market.

Cost of Sales Formula is equal to Opening Inventory + Purchases - Closing Inventory as shown below:

                                                             Rs.

 

Opening Inventory                               XXX

+ Purchases                                        XXX

                                                          _______

Cost of Goods Available for Sale        XXX

- Closing Inventory                              XXX

                                                          ________

   Cost of Sales                                    XXX

                                                         _________