Which of the following refers to the costs of inventory that has been sold?

The correct answer, Cost of Goods Sold (COGS), refers specifically to the costs associated with the inventory that a business has sold during a given period. COGS is a key figure in determining gross profit, as it accounts for all direct costs related to the production of goods that were sold. This includes costs such as materials, labor, and any overhead directly tied to the manufacturing process.

Understanding COGS is crucial for businesses as it affects profitability; a higher COGS indicates lower profits, assuming revenue remains constant. This metric is essential for financial analysis and is often reported on financial statements, specifically the income statement, to give stakeholders insight into production efficiency and pricing strategies.

In contrast, operating expenses refer to the ongoing costs of running the business that aren’t tied directly to the production of goods, the annual report is a comprehensive report on a company's activities throughout the preceding year, and the trial balance is an accounting report that lists the balances of all ledgers. None of these terms encompass the specific meaning of costs incurred from sold inventory as COGS does.