Both the debit and credit amounts in the merchandise inventory account at the end of an accounting period are used to calculate the cost of goods sold.

Question

Quizplus · Accepted Answer

The debit amount in the merchandise inventory account represents the beginning inventory, and the credit amount represents the ending inventory. The cost of goods sold is calculated by subtracting the ending inventory from the beginning inventory.

Both the Debit and Credit Amounts in the Merchandise Inventory