Income Statements and Cost of Goods Sold

Expenses

The costs incurred in the process of generating sales, such as rent, salaries, and utilities.

Gross profit

The difference between sales and the cost of goods sold.

Cost of goods sold

The direct costs attributable to the production of the goods sold by a company.

Net income (loss)

The total amount of profit or loss after all expenses have been deducted from the gross profit.

Merchandise inventory

The value of goods that a company has in its inventory.

Sales

Total revenue generated from sales of goods or services.