Beginning inventory + cost of goods manufactured = Cost of goods sold + Ending inventory.

Question

Quizplus · Accepted Answer

This equation represents the basic accounting equation for inventory. Beginning inventory is added to the cost of goods manufactured (the cost of producing the goods during the accounting period), and the sum is equal to the cost of goods sold plus the ending inventory (the value of the goods that remain on hand at the end of the accounting period).

Beginning Inventory + Cost of Goods Manufactured = Cost of Goods