Cost of Goods Sold - What is the difference between COGS and expenses?

Q: What is the difference between COGS and expenses?

Your expenses includes the money you spend running your business. ... The difference between these two lines is that the cost of goods sold includes only the costs associated with the manufacturing of your sold products for the year while your expenses line includes all your other costs of running the business.

Answer

The funds used to operate your firm are a part of your costs.... The cost of goods sold line only covers the expenses related to making the products that were sold that year, whereas the expenses line includes all the other costs of running the firm.

Cost of Goods Sold - What is the difference between COGS and expenses?

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