The difference between merchandise available for sale and the cost of goods sold is that the cost of goods sold includes _____.

Question

Quizplus · Accepted Answer

The cost of goods sold includes beginning inventory, purchases, and transportation charges, less any ending inventory. Merchandise available for sale is the sum of beginning inventory and purchases, but does not take into account any inventory that remains unsold at the end of the period (ending inventory). Operating expenses are not included in either merchandise available for sale or cost of goods sold. Therefore, the only choice that is included in cost of goods sold and not in merchandise available for sale is ending inventory (choice D).

The Difference Between Merchandise Available for Sale and the Cost