What comes under cost of sales when making a profit and loss account from a trial balance?
Cost of sales includes costs of goods sold (ie inventory) and other direct costs (such as workers payroll and benefits, equipment used on the job) that can be distinguished for a particular project or job. To calculate cost of goods sold look around for a formula that looks something like this: Beginning Inventory + purchases +/- adjustments (I am forgetting some of them here) – ending inventory = cost of goods sold Any payroll hours and its corresponding benefits also go into cost of sales. Marketing costs can sometimes go into it also. It depends what type of business because each has their own unique costs.
