Quora Answer: Is Cost of Goods Sold an Asset?

The following is my answer to a Quora question: “Is the cost of goods sold an asset?”

The cost of goods sold is the costs associated with the production or acquisition of goods.  This is reflected in the profit and loss account.  The revenue less the cost of goods sold gives us the gross profit.  This gross profit is then reflected in the balance sheet.  Less the cost of operating the business, we arrive at the net profit.  As the name suggests, it is a cost.  It cannot be an asset, which are resources owned by the company, and which have future economic value that can be quantified and expressed in the balance sheet.