Using the periodic approach to accounting for inventory, beginning inventory plus purchases minus ending inventory as determined by a physical stocktake, is assumed to equal:

Question

Quizplus · Accepted Answer

The periodic approach to accounting for inventory uses the equation beginning inventory plus purchases minus ending inventory to determine the cost of goods sold (also known as cost of sales) for the period. This is because at the end of the accounting period, a physical stocktake is conducted to determine the ending inventory, and the difference between beginning inventory plus purchases and ending inventory is the amount of inventory that was sold during the period. Therefore, the correct answer is D - cost of sales.

Using the Periodic Approach to Accounting for Inventory, Beginning Inventory