The cost of goods sold account carries a normal debit balance. Because COGS is classified as an expense account on the income statement, it tracks the direct costs attributable to the production of the goods sold by a company. In double-entry bookkeeping, recording or increasing an expense requires a debit entry. Conversely, credits to the COGS account are exceedingly rare during normal trading operations and typically occur only when making accounting corrections, year-end adjustments, or inventory return adjustments.