Ans. Cost of goods sold is the full form of COGS, this refers to the direct costs of producing the goods that are sold by a company. This amount includes the cost of the materials and the cost of labour directly which are used to create the good. Cost of goods sold is also known as cost of sales.To determine the cost of goods sold during an accounting period, the COGS formula:COGS = Opening Inventory + Purchases – Closing Inventory.Gross Income = Gross Revenue – COGS.Net Income = Revenue – COGS – Expenses.