The cost of sales is calculated as follows:
A)ending inventory + purchases - beginning inventory
B)purchases - ending inventory - beginning inventory
C)beginning inventory + purchases - ending inventory
D)beginning inventory - purchases + ending inventory

Question

Quizplus · Accepted Answer

The cost of sales is the cost of goods that were sold during the accounting period. This is calculated by adding the beginning inventory to the purchases made during the period and then subtracting the ending inventory. This is because the cost of goods sold is the inventory that was available for sale during the period minus any inventory that was not sold. Therefore, the correct formula for calculating cost of sales is beginning inventory + purchases - ending inventory.

The Cost of Sales Is Calculated as Follows