Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

4. Merchandising Operations

Cost of Goods Sold - Perpetual Inventory vs. Periodic Inventory

Financial Accounting

4. Merchandising Operations

Cost of Goods Sold - Perpetual Inventory vs. Periodic Inventory

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Multiple Choice

Which of the following sets of values are necessary to compute Cost of Goods Sold (COGS) under the periodic inventory system?

Beginning inventory, sales discounts, and freight-in

Sales revenue, purchase returns, and ending inventory

Beginning inventory, purchases, and ending inventory

Purchases, sales returns, and accounts receivable

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Verified step by step guidance

Understand the concept of Cost of Goods Sold (COGS) under the periodic inventory system. COGS represents the cost of inventory sold during a specific period and is calculated using the formula: \( \text{COGS} = \text{Beginning Inventory} + \text{Purchases} - \text{Ending Inventory} \).

Identify the components required for the calculation. The formula requires three key values: Beginning Inventory (the value of inventory at the start of the period), Purchases (the cost of inventory acquired during the period), and Ending Inventory (the value of inventory remaining at the end of the period).

Eliminate irrelevant values from the options provided. For example, sales discounts, sales revenue, purchase returns, and accounts receivable are not directly involved in the calculation of COGS under the periodic inventory system.

Focus on the correct set of values: Beginning Inventory, Purchases, and Ending Inventory. These are the necessary components to compute COGS accurately under the periodic inventory system.

Apply the formula \( \text{COGS} = \text{Beginning Inventory} + \text{Purchases} - \text{Ending Inventory} \) using the identified values to calculate the Cost of Goods Sold for the period.