Question

Cost of goods available for sale is: a) beginning inventory + cost of goods sold. b)...

Cost of goods available for sale is:

a) beginning inventory + cost of goods sold.

b) cost of goods sold + purchases.

c) ending inventory + cost of goods sold.

d) purchases + ending inventory.

Business   Accounting   
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Homework Answers

Answer #1

The Cost of goods available for sale is the price (at cost) of the goods which is available for sale to the customers. There are two ways to calculate the cost of goods available for sale:-

- Beginning Inventory + Purchases

- Ending Inventory + Cost of Goods sold

Both the methods will derive to the cost of goods available for sale.

Ending Inventory

Ending Inventory is the cost of the finished goods available in the stock at the end of the period.

Cost of Goods sold

Cost of goods sold  is the cost of the goods which have been already sold out to the customers.

The correct answer is

C) Ending Inventory + Cost of goods sold

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