Which statement(s) below correctly describe(s) the relationship of cost of goods sold and ending inventory? (Check all that apply.)Multiple select question.Cost of goods sold will equal total ending inventory.Cost of goods available for sale must be allocated between cost of goods sold and ending inventory.Cost of goods sold plus ending inventory will equal the total goods available for sale.Cost of goods sold plus goods available for sale will equal total goods in ending inventory.
Question
Which statement(s) below correctly describe(s) the relationship of cost of goods sold and ending inventory? (Check all that apply.)Multiple select question.Cost of goods sold will equal total ending inventory.Cost of goods available for sale must be allocated between cost of goods sold and ending inventory.Cost of goods sold plus ending inventory will equal the total goods available for sale.Cost of goods sold plus goods available for sale will equal total goods in ending inventory.
Solution
The correct statements that describe the relationship of cost of goods sold and ending inventory are:
- Cost of goods available for sale must be allocated between cost of goods sold and ending inventory.
- Cost of goods sold plus ending inventory will equal the total goods available for sale.
Explanation:
The first statement is incorrect because the cost of goods sold (COGS) is the cost of those goods actually sold during a given period and not the total ending inventory.
The second statement is correct because the cost of goods available for sale during a certain period is indeed split between the cost of goods sold and the ending inventory.
The third statement is correct because the total goods available for sale is the sum of the beginning inventory and the purchases during a given period. This total must be allocated between the cost of goods sold and the ending inventory.
The fourth statement is incorrect because the cost of goods sold plus goods available for sale does not equal total goods in ending inventory. The ending inventory is part of the goods available for sale that was not sold during the period.
Similar Questions
LO 10.2 Which of these statements is false?Choose one answer from the options below.A. If cost of goods sold is incorrect, ending inventory is usually incorrect too.B. beginning inventory + purchases = cost of goods soldC. ending inventory + cost of goods sold = goods available for saleD. goods available for sale – beginning inventory = purchasesBackNext
Select all that applyWhich of the following are the inventory accounts involved in a manufacturing cost accounting system?Multiple select question.Cost of goods soldWork-in-processDirect laborRaw materialsFinished goodsManufacturing overhead
Select all that applyWhich of the following costs are included in merchandise inventory?Multiple select question.Costs necessary to ready the merchandise for saleShipping fees charged by the vendorTrade discounts given to customersPurchase costsAdvertising costsTaxes assessed on the merchandise
Select all that applyCost of goods sold is characterized by which of the following statements?Multiple select question.Cost of goods sold is an asset reported on the balance sheet.Cost of goods sold is the money received from selling merchandise.Cost of goods sold is an expense reported on the income statement.Cost of goods sold includes the expenses of buying and preparing an item for sale.Cost of goods sold is also called cost of sales.Cost of goods sold is used to figure gross profit.
The cost of goods available for sale is allocated betweenGroup of answer choicesbeginning inventory and ending inventorybeginning inventory and cost of goods on handending inventory and cost of goods sold.beginning inventory and cost of goods purchased
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.