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    Allen Farber's Avatar
    Allen Farber Posts: 191, Reputation: 1
    Junior Member
    		  
    #1

    Jun 16, 2016, 06:19 PM
    Is Inventory an expense?
    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?
    paraclete's Avatar
    paraclete Posts: 2,706, Reputation: 173
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    #2

    Jun 16, 2016, 06:53 PM
    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
    Allen Farber's Avatar
    Allen Farber Posts: 191, Reputation: 1
    Junior Member
    		  
    #3

    Jun 17, 2016, 03:52 AM
    Quote Originally Posted by paraclete View Post
    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?
    paraclete's Avatar
    paraclete Posts: 2,706, Reputation: 173
    Ultra Member
    		  
    #4

    Jun 17, 2016, 06:58 AM
    I expect your opening inventory was zero
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