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

Question

Quizplus · Accepted Answer

In a periodic inventory system, cost of goods sold is calculated by subtracting ending inventory from cost of goods available for sale. This is because the cost of goods available for sale includes both the beginning inventory and any purchases made during the period, which gives the total cost of goods that could have been sold. Subtracting the ending inventory gives the cost of goods that were actually sold during the period.

In Order to Determine Cost of Goods Sold in a Periodic