If a company had $3,500 in inventory on hand at the end of the month, and made purchases of $7,500 during the month, the Cost of Goods Sold they should record on their Income Statement for the month would be:
A)$ 7,500
B)$ 4,000
C)$ 3,500
D)$11,000

Question

Quizplus · Accepted Answer

The Cost of Goods Sold is calculated as Beginning Inventory + Purchases - Ending Inventory. Therefore, the Cost of Goods Sold in this scenario would be $7,500 (purchases) - $3,500 (ending inventory) = $4,000. Choice B is the correct answer.

If a Company Had $3,500 in Inventory on Hand at the End