Desired Ending Inventory Is 25% More Than Beginning Inventory

question 77

Multiple Choice

Desired ending inventory is 25% more than beginning inventory. If purchases total $160,000, which of the following statements is true regarding cost of goods sold (COGS) ?

• A)COGS will exceed cost of goods available for sale.
• B)COGS will be less than purchases.
• C)COGS will exceed purchases.
• D)COGS will equal $55,000.

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Definitions:

Sales Tax

A tax imposed by governments on the sale of goods and services, collected by the retailer at the point of sale and passed on to the government.

Cash Refund

A repayment to a customer in cash for the return of products or for rebate claims.

General Journal

A primary accounting record used to record all non-specific financial transactions of a business in chronological order.

Sales Tax

A consumption tax imposed by the government on the sale of goods and services, collected by the retailer at the point of sale.