16.We adjust the opening and closing inventory to ensure the sales made during the year to match with? we arrive at, select the suiatable option. A. Actual value of goods B. Actual cost of goods C. Actual COGS D. Actual profit
Question
16.We adjust the opening and closing inventory to ensure the sales made during the year to match with? we arrive at, select the suiatable option. A. Actual value of goods B. Actual cost of goods C. Actual COGS D. Actual profit
Solution
The answer is C. Actual COGS (Cost of Goods Sold).
Here's why:
Step 1: Understand the question. The question is asking what we are trying to match when we adjust the opening and closing inventory.
Step 2: Understand the options.
A. Actual value of goods: This is the market value of the goods.
B. Actual cost of goods: This is the cost to produce the goods.
C. Actual COGS (Cost of Goods Sold): This is the cost of those goods that were actually sold during the year.
D. Actual profit: This is the revenue minus the costs.
Step 3: Choose the correct option.
When we adjust the opening and closing inventory, we are trying to ensure that the cost of the goods that were actually sold during the year (COGS) matches with the sales. This is because the COGS is the most accurate reflection of the cost associated with the sales made during the year. Therefore, the answer is C. Actual COGS.
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