Which of the following statements is incorrect?
A)Ending inventory exceeds beginning inventory when purchases are greater than cost of goods sold.
B)Cost of goods sold exceeds purchases when ending inventory is less than beginning inventory.
C)Cost of goods available for sale will always be equal to or greater than cost of goods sold.
D)Ending inventory is greater than beginning inventory when purchases are less than cost of goods sold.

Question

Quizplus · Accepted Answer

The incorrect statement is D because if purchases are less than the cost of goods sold, it typically means that the company has used more of its inventory than it has purchased, leading to a decrease rather than an increase in ending inventory compared to beginning inventory.

Which of the Following Statements Is Incorrect