The format of the "cost of goods sold, inventory, and purchases" budget is as follows:

Question

Quizplus · Accepted Answer

The format of the cost of goods sold, inventory, and purchases budget is the beginning inventory plus purchases (amount spent on acquiring new inventory) minus the ending inventory. This formula can be rearranged to show that purchases are equal to cost of goods sold plus ending inventory minus beginning inventory. Therefore, the correct option is B: cost of goods sold + desired ending inventory - beginning inventory.

The Format of the "Cost of Goods Sold, Inventory, and Purchases