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LBenware
Level 3

Cost of Goods sold vs expense

I am having trouble finding where to categorize this. I did a landscape repair job for a client, so I purchased some rock, sand, and a few other materials to complete the job on a company credit card. I charged the customer for this on the invoice as job supplies, but not sure how to categorize it on my books. Would this be cost of goods sold? I do not have a physical inventory that I'm selling from.

1 Comment 1
docsbp29
Level 1

Cost of Goods sold vs expense

The effect on your profits is the same either way. Cost of goods sold is usually for costs/expenses directly related to sales so this is probably best in your situation. Expenses are generally more for overhead expenses like rent, utilities, insurance etc

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