If a merchandising company ends a period with a larger inventory than it owned at the beginning of the period, then,

Question

Quizplus · Accepted Answer

If the company ends a period with a larger inventory than it owned at the beginning of the period, then it must have purchased more inventory than it sold during the period. Therefore, net purchases must have exceeded the cost of goods sold, resulting in a larger inventory balance. This means the cost of goods sold was smaller than net purchases.

If a Merchandising Company Ends a Period with a Larger