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 correctly represents the formula for Cost of Goods Sold (COGS) under the periodic inventory system?

COGS = Purchases - Beginning Inventory + Ending Inventory

COGS = Beginning Inventory - Purchases + Ending Inventory

COGS = Ending Inventory - Purchases + Beginning Inventory

COGS = Beginning Inventory + Purchases - Ending Inventory

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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. It is calculated using the formula that accounts for the beginning inventory, purchases made during the period, and the ending inventory.

Identify the components of the formula: Beginning Inventory refers to the inventory available at the start of the period. Purchases represent the inventory acquired during the period. Ending Inventory is the inventory remaining at the end of the period.

Recall the relationship between these components: The formula for COGS is derived from the principle that the total inventory available for sale during the period (Beginning Inventory + Purchases) is reduced by the Ending Inventory to determine the inventory sold.

Analyze the given options: Compare each formula provided in the problem to the correct formula for COGS under the periodic inventory system, which is COGS = Beginning Inventory + Purchases - Ending Inventory.

Confirm the correct formula: The correct representation of COGS under the periodic inventory system is COGS = Beginning Inventory + Purchases - Ending Inventory, as it accurately reflects the calculation process based on the inventory flow during the period.