Accounting for IGCSE & O level - Final Statements (Section 11 - No. 25)
What is the role of the closing inventory in calculating gross profit?
It is directly added to the gross profit calculation.
It is used to determine the cost of goods sold which is then used for gross profit calculation.
It is used to calculate the sales revenue.
It is used to calculate the total purchases made during the year.
Explanation
Closing inventory is used in calculating the Cost of Goods Sold.
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