Which financial statement shows the cost of goods sold?

The Income Statement is the financial statement that presents the cost of goods sold (COGS). This statement provides a detailed account of a company's revenues and expenses over a specific period, ultimately leading to the calculation of net income.

Cost of goods sold is a critical expense for businesses that sell goods, as it represents the direct costs attributable to the production of the goods sold during that period. By being positioned right after revenues on the Income Statement, COGS allows for the calculation of gross profit, which is essential for assessing the financial performance of a company.

In contrast, the Balance Sheet outlines a company's assets, liabilities, and equity at a specific point in time, without detailing revenues or expenses. The Cash Flow Statement focuses on the inflow and outflow of cash, providing insight into the liquidity and cash-generating capabilities of the business, but it does not detail specific income or expenses like COGS. The Statement of Retained Earnings reflects changes in equity and retained earnings but does not include specific expense details like COGS. Thus, the Income Statement is the appropriate financial statement to reference when looking for cost of goods sold.