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An ecommerce-accounting firm's step-by-step COGS formula, useful as the accounting-correct companion to the more operational landed-cost guides.

How to Calculate Cost of Goods Sold (COGS)

From ledgergurus.com by LedgerGurus

  • COGS = Beginning Inventory + Purchases - Ending Inventory
  • Extended formula adds freight-in, subtracts discounts and returns
  • COGS drives gross profit on your P&L directly
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