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Question
How does closing inventory affect profit?
How does closing inventory affect profit?
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Solution
An increase in the closing inventory leads to a reduction in the value of the cost of goods sold, which results in an increase in the gross profit.
In other words, the value of closing inventory has a direct effect on the gross profit.
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An increase in the closing inventory leads to a reduction in the value of the cost of goods sold, which results in an increase in the gross profit.
In other words, the value of closing inventory has a direct effect on the gross profit.
Also read:
Learn about more questions and answers on business studies and various other commerce topics from our website.
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