The amount of costs transferred from the Inventory account to the Cost of Goods Sold account during January was:
A) $0.
B) $35,000.
C) $55,000.
D) Some other answer.

Question

Quizplus · Accepted Answer

The Cost of Goods Sold account represents the expenses incurred to produce or purchase the goods that were sold during the period. In order to calculate the cost of goods sold, the beginning inventory is added to the cost of purchases made during the period, and then the ending inventory is subtracted. Since there is no information given about the beginning and ending inventory levels, we can assume that the company started the month with no inventory and purchased $55,000 worth of goods during the month. Therefore, the amount of costs transferred from the Inventory account to the Cost of Goods Sold account during January was $55,000.

The Amount of Costs Transferred from the Inventory Account to the Cost