Regardless of the inventory costing system used, cost of goods available for sale must be allocated at the end of the period between
A) net purchases during the period and ending inventory.
B) beginning inventory and cost of goods sold.
C) ending inventory and beginning inventory.
D) ending inventory and cost of goods sold.
E) beginning inventory and net purchases during the period.

Question

Quizplus · Accepted Answer

According to the formula for calculating cost of goods sold, we need to subtract the ending inventory from the cost of goods available for sale. Hence, the remaining amount would represent the cost of goods sold. Therefore, the allocation of cost of goods available for sale must be between ending inventory and cost of goods sold.

Regardless of the Inventory Costing System Used, Cost of Goods