Beginning inventory and ending inventory have opposite effects on cost of goods sold.

Name: Beginning inventory and ending inventory have opposite effects on cost of goods sold.
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Question

Quizplus · Accepted Answer

Beginning inventory is included in the calculation of cost of goods sold, while ending inventory is not. Therefore, an increase in beginning inventory will increase cost of goods sold, while an increase in ending inventory will decrease cost of goods sold.

Beginning Inventory and Ending Inventory Have Opposite Effects on Cost