What expense category do sales fall under?
There are a few different ways to categorize expenses, and "sales" could fall under a few different categories. The most common categories are:
- Cost of goods sold (COGS)
- Operating expenses
- Other expenses
Cost of Goods Sold (COGS)
If you're in a product-based business, your sales will generally fall under the category of cost of goods sold (COGS). This includes the cost of materials and labor necessary to produce the product, as well as any shipping or other costs associated with getting the product to the customer.
Operating Expenses
If you're in a service-based business, your sales will generally fall under the category of operating expenses. This includes the cost of labor necessary to provide the service, as well as any other costs associated with running the business (rent, utilities, etc.).
Other Expenses
There are a few other possible expense categories that sales could fall under, depending on the business. These include marketing and advertising expenses, research and development expenses, and general and administrative expenses.
In general, sales should fall under one of the above categories. If you're not sure which category is appropriate for your business, you should talk to your accountant or financial advisor.
