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

In both perpetual and periodic inventory systems, beginning inventory plus the cost of goods purchased equals:

Cost of Goods Available for Sale

Net Purchases

Cost of Goods Sold

Ending Inventory

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Verified step by step guidance

Understand the concept: In inventory accounting, the formula 'Beginning Inventory + Cost of Goods Purchased' is used to calculate the Cost of Goods Available for Sale. This represents the total inventory that a company has available for sale during a specific period.

Clarify the terms: 'Beginning Inventory' refers to the inventory on hand at the start of the accounting period, and 'Cost of Goods Purchased' includes all purchases made during the period, adjusted for purchase returns, allowances, and discounts.

Relate the formula to the options: The formula 'Beginning Inventory + Cost of Goods Purchased' does not directly calculate Net Purchases, Cost of Goods Sold, or Ending Inventory. Instead, it calculates the Cost of Goods Available for Sale, which is the total inventory available before any sales or adjustments.

Explain the distinction: Cost of Goods Sold is derived from the Cost of Goods Available for Sale by subtracting Ending Inventory. Ending Inventory is the portion of inventory that remains unsold at the end of the period.

Conclude the reasoning: Based on the formula and definitions, the correct answer is 'Cost of Goods Available for Sale,' as this is the direct result of adding Beginning Inventory and Cost of Goods Purchased.