COGS Account

COGS Account records the cost or expense incurred as a result of selling the item in the Invoice/Credit Memo screen. 

This cost is a vital component of the income statement and required to accurately determine your organization's net income.  A COGS Account is required for each inventoried item. When a credit memo is entered in Invoice/Credit Memo, the COGS Account will be decreased to reflect the return of product to inventory. 

You must manually record any other increases or decreases in the COGS Account.