What is the relationship between sales and cost of goods last term. 1. proportional 2. counterproductive 3. There is no direct relationship

The two are proportional......

The relationship is very direct correlation between sales and cost of sales

And Nstodhaa of the following simple equation that must teach any accountant herself a summary of the trading account as: purchases (+) stock first term = cost of goods available for sale (-) stock last term = cost of goods sold actually: the foregoing understand and it seems clear that the relationship between actually stocks last duration and cost of goods sold is an inverse relationship Whenever stocks last time I increased cost of goods sold already, and vice versa

Of course, self-evident and that the concept of an inverse relationship between stocks last term and sales higher the sales Say stocks last term and vice versa, and that the relationship between sales and cost of goods sold to be very positive relationship

That is because their relationship stocks last term one and the same with reversed track

Net sales are the total amount of revenue gained from a business selling its product, minus discounts, and sales returns and allowance. The discounts are reductions in price granted to help promote the sale of a product. Sales returns and allowances are contra revenue accounts, or negative balances. Returns measure the value of goods returned by a customer, while the returns allowance is an estimate of the value of defective or mis-shipped goods that will be returned in the immediate future after the reporting period. Net sales are reported in the income statement.

Cost of goods sold reflects the production and shipping expenses related to selling a product. Normally the greatest expense on an income statement, cost of goods is calculated by adding the cost of goods purchased to the value of inventory at the beginning of the year, plus the cost of freight, minus the value of inventory at the end of the period.

Related Reading: What Is the Difference Between Net Revenue & Operating Income?

Inventory as valued plays a significant role in the calculation of Cost of Goods sold. The two most common inventory valuation methodologies are First-In-First-Out (FIFO) and Last-In-First-Out. FIFO assumes that the first goods produced are the first sold, meaning that the when a good is sold the expense related to producing the first item of merchandise is recognized. LIFO assumes the opposite, so that the latest produced goods are the first sold and the expense of producing the last item of merchandise is recognized. Since objects that are produced later are generally more expensive, the LIFO tends to increases the cost of goods sold which decreases income for both tax and reporting purposes.

Gross margin is the difference between net sales and cost of goods sold, or net sales minus cost of goods sold. Gross margin is also known as gross profit and represents the productivity of a business’s operations. A business’s profitability is defined by more than its operations. In addition to the gross margin, a business’s value for the year is determined by the sales of long-term assets, financing costs and expenses not related to producing a business’s goods.

When preparing financial statements and tax returns, consult with a certified public accountant (CPA). This article does not provide legal advice; it is for educational purposes only. Use of this article does not create any attorney-client relationship.

Answer is Proportional

1. >>>>>>>>>>>>proportional

SALES=COST OF GOODS + PROFIT