If ending inventory and cost of goods sold are added together, they should equal cost of goods available for sale.

Question

Quizplus · Accepted Answer

This statement is the essence of the equation used in the calculation of cost of goods sold: Beginning Inventory + Purchases - Ending Inventory = Cost of Goods Sold. Rearranging the equation, we get: Beginning Inventory + Purchases = Ending Inventory + Cost of Goods Sold. Therefore, Cost of Goods Sold + Ending Inventory = Cost of Goods Available for Sale.

If Ending Inventory and Cost of Goods Sold Are Added