Teraoka CPA

Cost of Goods Accounts

The Cost of Goods accounts, also called Cost of Sales or Cost of Goods Sold, represent the food and

beverage purchases to provide the meals. Other expenses directly related to sales may be included, such as

merchant fees or consumable cups and napkins.

The numbers used here also provide consistency across all accounts, as the last 3 digits of each COGS

category is the same as the last 3 digits on the associated inventory account.

Expense Accounts

This example separates the expense accounts into three primary categories: payroll expenses and other

expenses. The payroll expenses are grouped in the 6000 range, with the other operating expenses in the

7000 range. Overhead like rent, taxes, and amortization are bumped into the 8000 range.

While accounts must be broken down at least far enough to separate tax lines, combining rarely used

accounts will make the overview much easier to understand. The following list combines several categories

that are often separated on other charts.

You should check with your accountant or tax preparer to ensure that anything you combine does, in fact,

share the same tax line.

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