Table of contents

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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

A company started the year with $10,000 of inventory. During the year, it purchased $25,000 of additional inventory and ended the year with $8,000 of inventory. Under the periodic inventory system, what is the cost of goods sold (COGS) for the year?

$33,000

$23,000

$35,000

$27,000

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Verified step by step guidance

Step 1: Understand the formula for calculating Cost of Goods Sold (COGS) under the periodic inventory system. The formula is: COGS = Beginning Inventory + Purchases - Ending Inventory.

Step 2: Identify the values provided in the problem. Beginning Inventory = $10,000, Purchases = $25,000, and Ending Inventory = $8,000.

Step 3: Substitute the values into the formula. Using MathML, the formula becomes:

COGS = Beginning Inventory + Purchases - Ending Inventory

. Substituting the values:

COGS = 10,000 + 25,000 - 8,000

Step 4: Perform the addition and subtraction operations step by step. First, add Beginning Inventory and Purchases:

10,000 + 25,000 = 35,000

. Then subtract Ending Inventory:

35,000 - 8,000

Step 5: The result of the subtraction gives the Cost of Goods Sold (COGS) for the year. This is the final value you would calculate based on the operations above.