Which Statement Best Depicts the Inventory Cost Flow Equation

question 130

Multiple Choice

Which statement best depicts the inventory cost flow equation?

• A)Beginning inventory + Sales = Cost of sales + Ending inventory.
• B)Beginning inventory + Goods manufactured = Cost of sales + Ending inventory.
• C)Beginning inventory - Purchase returns = Cost of sales + Ending inventory.
• D)Ending inventory + Purchases = Cost of sales + Beginning inventory.

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Definitions:

Evaluating Across Companies

The process of comparing financial performance, strategies, and metrics of different companies within the same industry.

Petty Cash Fund

A small amount of cash kept on hand for minor or incidental expenses within a business.

Journal Entry

A record in accounting that represents a transaction and its effects on various accounts, typically involving at least one debit and one credit.

Cash Short and Over

An account that tracks discrepancies between the expected cash amounts and the actual cash counted, indicating shortages or overages.