1) Why is Cost of Goods Sold listed under revenues on the Income Statement if it is actually an expense?2) Does it have a credit or debit balance?3) What other if any statements does it appear on, and what accounts does it affect?I am providing a sample question and if you could help explain it I would appreciate it."ABC International has a beginning balance in its inventory asset account of $500,000. It buys $450,000 of materials from suppliers during the month. At month-end, it counts its ending inventory and determines that there is $200,000 of inventory on hand. The cost of goods sold journal entry is:"Debit CreditCost of Goods Sold $750,000Purchases $450,000Inventory $300,000"This entry matches the ending balance in the inventory account to the costed actual ending inventory, while eliminating the $450,000 balance in the purchases account."

Question

1) Why is Cost of Goods Sold listed under revenues on the Income Statement if it is actually an expense?
2) Does it have a credit or debit balance?
3) What other if any statements does it appear on, and what accounts does it affect?

I am providing a sample question and if you could help explain it I would appreciate it.

"ABC International has a beginning balance in its inventory asset account of $500,000. It buys $450,000 of materials from suppliers during the month. At month-end, it counts its ending inventory and determines that there is $200,000 of inventory on hand. The cost of goods sold journal entry is:"

Debit Credit
Cost of Goods Sold $750,000

Purchases $450,000

Inventory $300,000

"This entry matches the ending balance in the inventory account to the costed actual ending inventory, while eliminating the $450,000 balance in the purchases account."

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