What do you call the total costs incurred to acquire goods for resale?

The total costs incurred to acquire goods for resale are referred to as purchases. This term specifically relates to the direct costs associated with obtaining inventory that a business will sell to its customers. It includes the price of the goods, any additional shipping or handling charges, and any taxes incurred during the acquisition process.

Purchases form a crucial component of the cost of goods sold (COGS) calculation, which helps determine the gross profit for a business. Understanding this concept is essential for tracking inventory and managing financial health.

Other terms may refer to different aspects of accounting. For instance, expenses are broader and include all costs incurred by a business to operate, not just those related to acquiring goods for resale. Assets relate to any resources owned by the business that have economic value, which can include inventory but also includes cash, buildings, and equipment. Cost deductions typically refer to reducing taxable income rather than the costs of acquiring goods directly.