Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 46 - No. 20)
How is the 'cost of goods sold' (COGS) calculated?
Beginning inventory + Purchases - Ending inventory
Sales revenue - Operating expenses
Beginning inventory - Purchases + Ending inventory
Gross profit - Operating expenses
Explanation
COGS is calculated to determine the direct costs associated with selling inventory during the period.
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