Which of the following would be classified as an expense?

The classification of expenses in accounting is crucial for understanding a company's financial performance. The correct choice, which is the cost of goods sold, represents the direct costs attributable to the production of the goods that a company sells. This includes expenses like raw materials, labor directly involved in production, and other direct costs associated with manufacturing the product.

When a company sells a product, it incurs certain costs that need to be deducted from revenue to determine the gross profit. Thus, the cost of goods sold is categorized as an expense in an income statement, reducing the total revenue to give a clearer picture of profitability.

In contrast, revenue from product sales represents income generated from selling products and is not considered an expense. Increased equity reflects the ownership stake in the company and is not an expense but rather a measure of financial strength. Accounts receivable, which indicates amounts owed to the company by customers, is an asset and does not qualify as an expense. Understanding these distinctions is fundamental to accurate financial reporting and analysis.