Inventory Cost: Businesses that sell products to customers have to deal with inventory, which is either produced by the company itself or bought from a separate manufacturer. Inventory costing is when companies assign costs to products. These costs also include incidental fees such as storage, administration and market fluctuation. Generally accepted accounting principles (GAAP) use standardized accounting rules to ensure companies do not understate or overstate these costs. COGS Items previously in inventory that are sold off are recorded on a companys income statement as cost of goods sold (COGS).

Assets: Assets are something you own or have and they are resources you expect to gain a benefit from in the future. Depending on the nature of the business there are many things that can be classified as assets. Some examples of assets are: Cash (refers to the business cash available but can also be a checking or savings account) Office Supplies or other prepaid expenses (any expenses the business pays in advance)