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RD, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 8784
Experience:  MBA, CPA
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I have a consulting firm. A new client I acquired is out of

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I have a consulting firm. A new client I acquired is out of the state so I have had to travel for meetings. Do these costs get accounted for as COGS? I will be invoicing them for travel expenses, but I don't know if they should be booked as an expense and tagged for the specific project or if it is COGS.

RD :

You can report these under a new account titled as "Reimbursed Expense Account" or as Travel expenses. These would be part of operating expenses. You do not record these as cost of goods sold.

Customer :

Thank You ! And just to confirm COGS are only direct costs used in the actual production of a product. ie: direct materials, direct labor

RD :

Yes that is correct

Customer :

Thank You !

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