Using the Following Letters to Represent Items

question 23

Multiple Choice

Using the following letters to represent items:

P = Purchases (net)
C = Cost of goods sold
B = Beginning inventory
E = Ending inventory
Which equation is correct?

• A)B - C + P = E
• B)B - E = C + P
• C)P - E = B + C
• D)B = C - E + P

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Definitions:

Two-Column Journal

A financial journal that has a simple format with only a debit and a credit column for recording transactions.

Transactions

Transactions involve the exchange of goods, services, or funds between two or more parties, forming the basic activities recorded in accounting.

Interim Financial Statements

Financial reports that cover a period of less than one year, often used to provide a snapshot of a company's financial health to investors and stakeholders on a quarterly or semi-annual basis.

Transactions

Operations or activities conducted by a business that involve the exchange of goods, services, or funds.