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16 December, 22:00

The cost of goods sold is calculated as follows:

A. Beginning Merchandise Inventory plus Net Delivered Cost of Purchases less Ending Merchandise Inventory equals Cost of Goods Sold.

B. Total Merchandise Available for Sale less Ending Merchandise Inventory.

C. Both A and B.

D. Neither A or B.

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Answers (2)
  1. 16 December, 23:24
    0
    The answer is C. Both A and B.

    Explanation:

    Cost of goods sold (COGS) refers to the direct costs of producing the goods sold by a company. This amount includes the cost of the materials and labor directly used to create the good.

    The cost of goods sold can be calculated as

    Opening stock + Net purchases - Closing stock

    Or

    Cost of goods available for sales - closing stock

    Which translate to option A and B above.
  2. 17 December, 01:50
    0
    C. Both A and B.

    Explanation:

    The movement in the inventory account between the start of a period and the end of that period is as a result of sales and purchases.

    Mathematically,

    Opening Inventory + Purchases - cost of goods sold = Closing Inventory

    As such,

    Cost of goods sold

    = Opening Inventory + Purchases - Closing Inventory

    The sum of the opening inventory and the purchases gives the total inventory available for sale.
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