Asked by I’m Ashes on Jun 06, 2024
Verified
Beginning inventory plus inventory purchases equals cost of goods sold.
Inventory Purchases
Transactions made by a business to acquire goods intended for sale during the normal course of operations.
Cost of Goods Sold
Direct costs attributable to the production of the goods sold by a company, including the cost of materials and labor.
- Understand the treatment of inventory purchases and costs under different inventory systems.
Verified Answer
ER
Emily RodriguezJun 10, 2024
Final Answer :
False
Explanation :
Beginning inventory plus inventory purchases equals total inventory available for sale. Cost of goods sold is calculated by subtracting ending inventory from total inventory available for sale. Therefore, the correct formula is:
Beginning inventory + Inventory purchases - Ending inventory = Cost of goods sold.
Beginning inventory + Inventory purchases - Ending inventory = Cost of goods sold.
Learning Objectives
- Understand the treatment of inventory purchases and costs under different inventory systems.
Related questions
Under a Perpetual Inventory System,purchases Are Debited to a Purchases ...
When a Sale Occurs Under a Perpetual Inventory System ...
Inventory Becomes Part of the Cost of Goods Sold When ...
Specialty Manufacturing Requires 5400 Gadgets Per Year for Production ...
Reserve Inventory Storage Costs Is Classified as a Shortage Cost