Question

Cost of goods available for sale is computed by adding: a) purchases to beginning inventory.b) beginning inventory to the cost of goods purchased. c) net purchases and freight-in. d) beginning inventory to net purchases.

Answer 1

Answer:

The correct answer is B and D

Explanation:

Cost of goods available for sale is defined as the price paid for the inventory which is ready for the customers to purchase. In short, it is the purchase price or the amount of all the merchandises that is ready for sale with the retailer in the market.

The formula to computing the cost of goods available is as:

Cost of goods available for sale = Net (Total) Purchases + Beginning Inventory

OR

Cost of goods sold for sale = Beginning (Starting) inventory + Cost of goods purchased

This computation measures or evaluates the inventory amount or price that the retailer has at any point during the period.