I have a client that rents equipment for weddings or events, the cost of the equipment is being recorded as COGS that can include from the labor, production, delivery an others.
what I been learning in the accounting of cost is something that is an attachment to the production or service of the sale and in this case, only labor will be considered COGS the renting or any other will be an expense.
can someone help me to find out if this is good or wrong
@Erik-Davila wrote:
I have a client that rents equipment for weddings or events, the cost of the equipment is being recorded as COGS that can include from the labor, production, delivery an others.
what I been learning in the accounting of cost is something that is an attachment to the production or service of the sale and in this case, only labor will be considered COGS the renting or any other will be an expense.
can someone help me to find out if this is good or wrong
renting is an expense and not COGS
COGS, especially when you file taxes, is the cost of the inventory you sell.
The labor to set up for the event is an expense, I would create an expense account called Cost of Sales (COS) and use that. It is not cogs.
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