Asked by Lourdes Orellana on Jul 03, 2024
Verified
At the start of the year, Southern Lights had $5,000 worth of merchandise. This Merchandise is called:
A) Cost of Goods Sold.
B) beginning inventory.
C) ending inventory.
D) Purchases.
Beginning Inventory
The cost of items on hand ready for sale at the opening of an accounting cycle.
Merchandise
This refers to goods or stock that a retail store has on hand to sell to customers, effectively the items available for sale in a commercial setting.
Purchases
Transactions involving the acquisition of goods or services in exchange for payment, for the purpose of operating a business.
- Discern the components and the approach for calculating the cost of goods sold.
Verified Answer
TW
Teelyly WangchiaxaJul 07, 2024
Final Answer :
B
Explanation :
The merchandise that a company has at the start of the year is referred to as the beginning inventory. This inventory represents the goods available for sale at the start of the accounting period.
Learning Objectives
- Discern the components and the approach for calculating the cost of goods sold.