Cost of Good Sold (COGS) Liabilities represent the direct costs associated with producing and selling goods to customers. These can include raw materials, labor required for production, as well as freight and delivery costs. COGS liabilities are an important consideration for any business looking to ensure a healthy bottom line, as their presence reduces the total profits realized from each sale. By keeping these costs in mind, businesses can better maximize the value received for every dollar invested in creating their products or services.