Question

Cost of goods sold is given by:

a. Beginning inventory + accounts payable - net purchases.
b. Net Purchases + beginning inventory - ending inventory.
c. Beginning inventory - net purchases + ending inventory.
d. Net purchases + ending inventory - beginning inventory.

Answer 1

Answer:

b. Net Purchases + beginning inventory - ending inventory.

Explanation:

The formula to compute the cost of goods sold is shown below:

Cost of good sold = Beginning inventory + net purchase - ending inventory

We simply added the net purchase and deduct the ending inventory to the beginning inventory so that the correct value can be determined

It records that cost which is directly related to the product that means it excludes the indirect cost