Question

Cost of goods sold is calculated from the following equation______.

• A. beginning inventory-cost of goods purchased + ending inventory
• B. sales- cost of goods purchased + beginning inventory - ending inventory
• C. sales + gross profit - ending inventory + beginning inventory
• D. beginning inventory + cost of goods purchased - ending inventory

Answer 1

The correct option is D beginning inventory + cost of goods purchased - ending inventory

Below are the accounting equations:

Gross Profit = Sales - Cost of goods sold

Cost of Goods Sold = Opening Stock + Purchases - Closing Stock