A company using the periodic inventory system has inventory costing $210 on hand at the beginning of a period. During the period, merchandise costing $635 is purchased. At year-end, inventory costing $160 is on hand. The cost of goods sold for the year is

A) $795
B) $685
C) $265
D) $635

The calculation for cost of goods sold in a periodic inventory system is:
Beginning inventory + Purchases - Ending inventory = Cost of goods sold
Using the numbers given in the question:
Beginning inventory = $210
Purchases = $635
Ending inventory = $160
$210 + $635 - $160 = $685
Therefore, the cost of goods sold for the year is $685. Option B is correct.