What expense category is inventory?
Audrey Carroll, Senior Manager, Accounting, RampSee how Ramp automates accounting for 25k+ businesses
There is no definitive answer to this question, as the correct expense category for inventory will vary depending on the business and its accounting practices. However, some common expense categories for inventory include:
Cost of Goods Sold (COGS)
Inventory is often classified as a cost of goods sold (COGS) expense. COGS includes the costs of acquiring or producing the goods that are sold by a business. For businesses that carry inventory, COGS also includes the cost of the inventory that was sold during the period. Inventory costs can include the cost of raw materials, labor, overhead, and shipping.
Inventory
Another common expense category for inventory is simply Inventory. This category includes the costs of acquiring or producing the goods that are held in inventory and are available for sale. These costs can include the cost of raw materials, labor, overhead, and shipping.
Other Expense Categories
Other possible expense categories for inventory include Cost of Sales or Expenses. These categories may be used depending on the accounting practices of the business.
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The information provided in this article does not constitute legal or financial advice and is for general informational purposes only. Please check with an attorney or financial advisor to obtain advice with respect to the content of this article.
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