Which of the Following Lists of Items Is Used to Compute

question 107

Multiple Choice

Which of the following lists of items is used to compute the cost of goods available for sale?

• A) Delivered cost of purchases and beginning inventory
• B) Sales, beginning inventory, and ending inventory
• C) Net sales, beginning inventory, and ending inventory
• D) Gross profit, beginning inventory, and ending inventory
• E) Beginning inventory and ending inventory

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Definitions:

Single-Step Format

In accounting, a method of income statement preparation where expenses are subtracted from revenues in a single step to calculate net income.

Pretax Income

The income earned by a business before tax is deducted.

Extraordinary Loss

A loss resulting from events that are both unusual and infrequent in nature, not expected to recur in the foreseeable future.

Extraordinary Items

Events and transactions that are distinguished by their unusual nature and infrequency, reported separately in financial statements for clearer analysis.