The term cost of goods sold is sometimes referred to as which of the following?

• A. Operating Costs
• B. Purchase Costs
• C. Cost Of Sales
• D. Administration Expenses

Answer: (C)

This question tests how the expense tied to the goods actually sold is labeled in accounting. The cost of goods sold is often called cost of sales, because it represents the costs directly associated with the goods that were sold to generate revenue. In many reporting frameworks, cost of goods sold and cost of sales are interchangeable terms for the same figure.

Why this fits best: it captures the idea that the expense is tied to the sale of inventory, not to the broader running of the business. The other options refer to different kinds of costs: operating costs cover the day-to-day running of the company, administration expenses are a subset of overhead, and purchase costs are just the price paid to acquire inventory (not always the full cost recognized to produce or sell the goods, which is what COGS/cost of sales represents).