Accounting for IGCSE & O level - Final Statements (Section 8 - No. 28)
What is the effect of increasing the opening inventory on the cost of goods sold?
Increases the cost of goods sold.
Decreases the cost of goods sold.
Has no effect on the cost of goods sold.
Increases the gross profit.
Explanation
Cost of Goods Sold = Opening Inventory + Purchases - Closing Inventory. An increase in opening inventory will increase COGS.
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