Under the periodic inventory approach the cost of sales during a period is determined as follows:
A) beginning inventory + net purchases - ending inventory;
B) beginning inventory - net purchases - ending inventory;
C) opening inventory + net purchases + closing inventory;
D) opening inventory - net purchases + closing inventory.

Question

Quizplus · Accepted Answer

Under the periodic inventory approach, the cost of goods sold is determined by adding the beginning inventory to the net purchases made during the period and then subtracting the ending inventory. This calculation results in the cost of goods sold during the period. Therefore, option A correctly represents the calculation of cost of sales during a period.

Under the Periodic Inventory Approach the Cost of Sales During