Cost of sales accounting compares sales revenues with the expenses incurred in producing goods or providing services, thereby enabling you to determine your gross profit. From this total, the expenses that cannot be directly assigned to sales are posted to the functional areas, such as sales, marketing, general and administration, or research and development. As a result, cost of sales accounting can show the economic purpose for which expenses have been incurred.

The following cost of sales profit and loss statement can be executed after every stage of the manufacturing and sales processes to reflect the effects of the process on FI. You can display the report before you being your demonstration to familiarize yourself with the existing values in the special purpose ledgers.