Asked by Denise Rodriguez on Jun 06, 2024
Verified
Using the following letters to represent items:
P = Purchases (net)
C = Cost of goods sold
B = Beginning inventory
E = Ending inventory
Which equation is correct?
A) B - C + P = E
B) B - E = C + P
C) P - E = B + C
D) B = C - E + P
Cost Of Goods Sold
The direct costs attributable to the production of goods sold by a company, including materials and labor.
Beginning Inventory
The value of goods available for sale at the start of an accounting period, carried over from the end of the previous period.
Ending Inventory
The total value of a company's merchandise, raw materials, and finished and unfinished products which have not yet been sold at the end of an accounting period.
- Calculate inventory costs using different inventory cost flow assumptions (e.g., FIFO, LIFO, weighted average).
Verified Answer
KS
Kayla SuttonJun 06, 2024
Final Answer :
A
Explanation :
The equation B - C + P = E represents the calculation of ending inventory by subtracting cost of goods sold from beginning inventory and adding purchases. This is the correct formula for calculating ending inventory using the given variables.
Learning Objectives
- Calculate inventory costs using different inventory cost flow assumptions (e.g., FIFO, LIFO, weighted average).