Is the cost of goods sold an expense?

While we often think of expenses as salaries, advertising, rent, interest, and so on, the cost of goods sold is also an expense. The cost of goods that were sold needs to be matched with the pertinent sales on the income statement, just as commission expense must be matched with sales or other revenues.

The FASB's Statement of Financial Accounting Concepts No. 6, Elements of Financial Statements, paragraph 81, states that "...expenses themselves are in many forms and are called by various names—for example, cost of goods sold, cost of services provided, depreciation...." You can find the concepts statements at

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