Cost of sales
Cost of sales is the cost of inventory sold during the period. In a simple periodic system it is opening inventory plus purchases and relevant costs less closing inventory, adjusted for returns where appropriate. The calculation follows the goods through the period: items still held at the end are excluded from the expense and remain inventory.
Worked example
Opening inventory 200 plus purchases 900 less closing inventory 300 gives cost of sales of 800.
Common mistake
Including closing inventory in both cost of sales and the closing asset.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | F1 | Direct | July 2027–August 2028 |
| ACCA | F2 | Direct | July 2027–August 2028 |
| ACCA | F3 | Supporting | July 2027–August 2028 |
| ACCA | FA | Direct | September 2026–June 2027 |
| ACCA | FR | Direct | Official assessment-window verification pending |
| ACCA | K1 | Direct | July 2027–August 2028 |
| CIMA | BA3 | Direct | Official assessment-window verification pending |
| FIA | FFA | Direct | September 2026–June 2027 |
Related terms
Also called: cost of goods sold, COGS