Which of the following sets of data is sufficient to compute the amount of cash paid for merchandise?
A)Cost of goods sold,increase or decrease in inventory,increase or decrease in accounts payable.
B)Increase or decrease in cash,increase or decrease in inventory,increase or decrease in accounts payable.
C)Cost of goods sold,increase or decrease in accounts payable.
D)Cost of goods sold.

Question

Quizplus · Accepted Answer

To compute the amount of cash paid for merchandise, you need to know the cost of goods sold, any increase or decrease in inventory (to adjust the cost of goods sold for the actual merchandise purchased), and any increase or decrease in accounts payable (to adjust for merchandise purchased on credit versus cash paid). This combination provides a complete picture of cash movement related to merchandise purchases.

Which of the Following Sets of Data Is Sufficient to Compute