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Basic Business Terms
Cost of Goods Sold
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What is Cost of Goods Sold?
Cost of Goods Sold
The Cost of Goods Sold is the direct cost of all items sold during an accounting period. In a retail type environment, this is usually calculated by taking the inventory held at the beginning of the period, adding inventory purchases, and subtracting the inventory held at the end of the period. In a manufacturing environment, these costs may include all of the supplies used to build the items sold as well as the amount paid to employees who built the items.
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