Cost of Goods Available for Sale Is Computed by Adding

question 202

Multiple Choice

Cost of goods available for sale is computed by adding

• A) beginning inventory to net purchases.
• B) beginning inventory to the cost of goods purchased.
• C) net purchases and freight-in.
• D) purchases to beginning inventory.

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Definitions:

Book Value

The net value of a company's assets found on its balance sheet, often calculated as total assets minus intangible assets and liabilities.

Straight-line Method

A method of calculating depreciation which spreads the cost of an asset evenly across its useful life.

Accumulated Depreciation

The cumulative sum of depreciation costs charged to a fixed asset from the time of its purchase.

Gain or Loss

The financial result of disposing or selling an asset or investment, measured by the difference between the sale price and the asset's book value.