During the Year, Carla's Pet Shop's Merchandise Inventory Decreased by $20,000

question 168

Multiple Choice

During the year, Carla's Pet Shop's merchandise inventory decreased by $20,000. If the company's cost of goods sold for the year was $300,000, purchases must have been

• A) $320,000.
• B) $280,000.
• C) $260,000.
• D) Unable to determine.

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Definitions:

Common Stock

A form of investment that signifies a stake in a corporation, granting its owners the right to vote and participate in the profits of the company through dividends.

Net Assets

The difference between the total assets and total liabilities of an entity, representing the owners' equity.

Common Stock

A form of corporate equity ownership, representing a claim on a portion of the company's assets and earnings.

Amortization Expense

Amortization expense is the process of systematically allocating the cost of an intangible asset over its useful life, reflecting the consumption of the asset's economic benefits over time.