Which of the following may be used to calculate ending inventory (EI)under the periodic inventory system?
A)BI + P + CGS = EI
B)BI + P - CGS = EI
C)BI - P + CGS = EI
D)BI + P + GM

Question

Quizplus · Accepted Answer

Under the periodic inventory system, ending inventory is calculated using the following formula: beginning inventory (BI) + purchases (P) - cost of goods sold (CGS) = ending inventory (EI). Therefore, option B is the correct formula to use for calculating ending inventory. Option A is incorrect because it adds the cost of goods sold to the beginning inventory and the purchases. Option C subtracts purchases from beginning inventory, which is incorrect. Option D is also incorrect because it mentions gross margin (GM), which is not used in the calculation of ending inventory under the periodic inventory system.

Which of the Following May Be Used to Calculate Ending