Refers to the intentional reduction in the equity with the objective of obtaining income. It represents the involuntary sacrifice of equity to generate income. Salaries of the employees in the administrative and sales departments represent expenses that do not pass through investment or cost, being transferred directly to the year's results (are not accumulated).
Depreciation of machinery in the industrial sector represents cost during the production process. Once the product is finished, it becomes a new investment. In this case, the cost of depreciation is accumulated and remains in reserve till the sale of the product. With the sale of the product and generation of income, this depreciation becomes an expense as a component of the Cost of Goods Sold. The expense, in this case, is due to the transfer of ownership of the asset to the customer through sale (the right thing is expense of products sold and not cost of goods sold).
Depreciation of furniture of the sales department represents an expense that is directly allocated to the result, without passing through investment or cost. When it is acquired, raw material is treated as an investment. The part of the raw material used in production is the manufacturing cost necessary to obtain a new asset or investment - the finished product.
When the product is sold, its cost must be allocated to the results as an expense. Since the transfer of ownership of the finished product is a sacrifice necessary for generating sales income, the right thing is to denominate the corresponding expense as an expense of goods sold. In practice, however, the expression (COS) Cost of Goods Sold is the standard expression.
