Answer to Question #125910 in Accounting for Everlyn

Question

What does the inclusion of a Cost of Goods Sold section in a Profit & Loss report indicate about a business?
A. It likely deals with inventory.
B. It likely deals strictly in service items.
C. It is likely a not-for-profit organization.
D. None of these; all P&L reports show this section.

Answer 1

A. It likely deals with inventory.

The cost of goods sold indicate the total price paid for purchases by the organisation, that is the inventory sold during an accounting period.