The change in merchandise inventory level from the beginning to the end of the year affects cost of goods sold.

Question

Quizplus · Accepted Answer

The change in merchandise inventory level from the beginning to the end of the year affects the cost of goods sold through the calculation of the cost of goods available for sale. The cost of goods available for sale is calculated by adding the beginning inventory and purchases, and then the ending inventory is subtracted to find the cost of goods sold.

The Change in Merchandise Inventory Level from the Beginning to the End