In order to determine cost of goods sold in a periodic inventory system we
A) subtract ending inventory from beginning inventory.
B) add purchases to beginning inventory.
C) subtract purchases from ending inventory.
D) subtract ending inventory from beginning inventory plus purchases.

Question

Quizplus · Accepted Answer

In a periodic inventory system, the cost of goods sold is determined by subtracting the ending inventory from the sum of the beginning inventory and the purchases made during the accounting period. This is because the beginning inventory reflects the cost of goods that were not sold from the previous period, and the purchases reflect the cost of goods acquired during the current period. Subtracting the ending inventory from the sum of these two amounts gives us the cost of goods sold during the period. Therefore, choice D is the correct answer.

In Order to Determine Cost of Goods Sold in a Periodic