Which item typically represents the largest expense related to the wholesale costs of inventory sold during an accounting period?

Cost of Goods Sold (COGS) represents the direct costs associated with the production of the goods that a company sells during an accounting period. This includes expenses related to the manufacturing of products, such as raw materials, labor, and overhead. For companies involved in wholesale, COGS is typically the largest expense because it reflects the costs incurred to procure or produce the inventory that will be sold to customers.

Operating Activities encompass all the primary revenue-generating activities of a business, including the sale of goods and services, but they are broader and cover more than just the costs directly tied to inventory. Financing Activities relate to transactions that involve raising capital or managing debt, while Investing Activities focus on the acquisition or disposal of long-term assets. Since these categories do not directly reflect the wholesale inventory expenses incurred, they do not represent the largest expense associated with inventory sold during the accounting period. Thus, COGS stands out as the most significant expense related to inventory for businesses focused on sales.