Under the periodic inventory system, the cost of merchandise sold is equal to the beginning merchandise inventory plus the cost of merchandise purchased plus the ending merchandise inventory.

Merchandise Inventory

refers to the goods available for sale to customers in the retail and wholesale industries.

Periodic Inventory System

An accounting method where inventory values and cost of goods sold are determined at the end of an accounting period.

Cost of Merchandise Sold

The total expense incurred by a business to sell goods over a period, including the cost of acquiring or manufacturing those goods.