Under the periodic inventory system a income statement cannot be prepared without a/an ____________.It is only after a/an ___________ that the cost of sales can be estimated.

Question

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Under the periodic inventory system, the cost of goods sold is calculated by subtracting the ending inventory from the cost of goods available for sale. A physical count of the inventory, known as a stocktake, is needed to determine the ending inventory. Without this information, the cost of goods sold cannot be accurately calculated, and therefore an income statement cannot be prepared. Choice A, B, and D are not relevant in this context.

Under the Periodic Inventory System a Income Statement Cannot Be