Which of the following formulas represents cost of sales for a retailing business?
A) Beginning inventory + purchases and freight in - ending inventory = cost of sales
B) Purchases and freight in - ending inventory = cost of sales
C) Ending inventory + purchases and freight in - beginning inventory = cost of sales
D) Beginning inventory - ending inventory = cost of sales

Question

Quizplus · Accepted Answer

The formula for cost of sales for a retailing business is beginning inventory + purchases and freight in - ending inventory = cost of sales. This formula takes into account the inventory at the beginning and end of the period, as well as the purchases and any freight costs incurred during the period. Option A correctly represents this formula.

Which of the Following Formulas Represents Cost of Sales for a Retailing