Question

Why is the cost of goods sold account part of a trading business only?
The cost of goods sold account is part of a trading business, but not seen in the income statement of a service business. This is because in a service business, no
goods are sold to the consumers.

MATERIAL

Answer 1

Answer:

Yes costs of goods sold is peculiar to those businesses dealing in tangible items

Explanation:

For a service company there is no costs of goods sold because no goods were purchased for resale.The major costs found in the cost structure of a service outfit is manpower costs,since people with requisite knowledge form the main reason for business existence