For example, if I bought $500 worth of materials and only sold $400 dollars worth. Would I deduct $400 (cogs) or would I take off the whole $500?

Inventory is an asset.

The methodology for calculating cost of sales is
opening inventory plus purchases less closing inventory equals cost of sales

putting your data in the equation

0+500-100=400

Inventory is an asset.

The methodology for calculating cost of sales is
opening inventory plus purchases less closing inventory equals cost of sales

putting your data in the equation

0+500-100=400

Thanks but what is the point of the 0 in the equation?

I expect your opening inventory was zero