Question

Does COGS have a beginning balance? An ending balance? Why or why not?

Answer 1

Cost of goods sold neither have beginning balance nor have ending balance. Only permanent accounts have ending and beginning balance and COGS is not a permanent account its a temporary account. All accounts which are itemized under balance sheet are called permanent account and all accounts which are classified under income statement are called temporary account. They are called temporary because they are closed at the end of every period to income summary account.