This Is an Extract from an Income Statement The Cost of Sales Is:
A)$14 000
B)$12 200
C)$18

question 23

Multiple Choice

This is an extract from an income statement: $\begin{array}{lr}&\$\\\text { Beginning inventory } & 10000 \\\text { Gross sales } & 32000 \\\text { Freight-in } & 2000 \\\text { Sales reburns } & 2000 \\\text { Ending inventory } & 12200 \\\text { Purchases } & 18200\end{array}$ The cost of sales is:

• A)$14 000
• B)$12 200
• C)$18 000
• D)$17 000

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Definitions:

Credit Terms

Terms for payment on account by the buyer to the seller.

Sales Discount

A reduction in the price of goods or services offered to customers, often to prompt early payment or bulk purchases.

Perpetual Inventory System

A system for managing inventory accounts that automatically updates the sale or purchase records using computerized point-of-sale technology and software for enterprise asset management.

Merchandise Inventory

The total value of a company’s goods that are available for sale to customers, comprising both raw materials and finished products.