Which of the following statements is correct?
A)Cost of goods available for sale is allocated between costs of goods sold and inventory at year-end.
B)A purchase of inventory on credit increases both cost of goods available for sale and cost of goods sold.
C)Purchases of inventory during a period less that period's cost of goods sold equals ending inventory regardless of the beginning inventory amount.
D)Cost of goods available for sale equals ending inventory plus purchases.

Question

Quizplus · Accepted Answer

Cost of goods available for sale is allocated between costs of goods sold and inventory at year-end. This is done in order to determine the value of inventory remaining at the end of a reporting period and the cost of the inventory that has been sold during the period.

Which of the Following Statements Is Correct