Cost of goods sold is equal to the cost of goods:
A) manufactured minus ending finished goods.
B) available for sale minus beginning finished goods.
C) available for sale minus ending finished goods.
D) manufactured minus beginning finished goods.

Question

Quizplus · Accepted Answer

Cost of goods sold represents the cost of the inventory items that were sold during the period. Therefore, it can be calculated by subtracting ending finished goods inventory from the cost of goods available for sale, which is equal to beginning finished goods inventory plus the cost of goods manufactured or purchased during the period. Therefore, the correct formula is: Cost of goods sold = Cost of goods available for sale - Ending finished goods inventory.

Cost of Goods Sold Is Equal to the Cost of Goods