Cost of sales is equal to:
A) The opening inventory plus the purchases made during the year
B) The purchases made during the year
C) The opening inventory plus the purchases made less the closing inventory
D) The opening inventory plus the purchases paid for less the closing inventory
E) None of the above

Question

Quizplus · Accepted Answer

Cost of sales is the cost of goods sold during a given period of time. It is calculated by taking the cost of the opening inventory and adding the cost of any purchases made during the period, and then subtracting the cost of the closing inventory. This gives the cost of the goods that were sold during the period. Therefore, choice C (the opening inventory plus the purchases made less the closing inventory) is the correct answer.

Cost of Sales Is Equal To