Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 24 - No. 25)
How is the cost of goods sold calculated?
Beginning Inventory + Purchases - Ending Inventory.
Beginning Inventory - Purchases + Ending Inventory.
Purchases + Ending Inventory - Beginning Inventory.
Beginning Inventory - Purchases - Ending Inventory.
Explanation
COGS is equal to the cost of goods available for sale (beginning inventory + purchases) minus the cost of goods still on hand (ending inventory).
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