Cost of Goods Sold – MCQ

Practice Question

Intro to Financial Accounting
Cost of Sales and Inventory Management
COGS
MCQs

If the beginning inventory was $50,000, purchases during the year were $150,000, and the ending inventory is $30,000, what is the cost of goods sold for the year?

Answer +
Correct Answer: B
Explanation +

Step 1: Identify key variables.
Beginning Inventory (BI) = $50,000
Purchases (P) = $150,000
Ending Inventory (EI) = $30,000

Step 2: Use the Cost of Goods Sold formula.
COGS = BI + P - EI

Step 3: Calculate COGS.
COGS = $50,000 + $150,000 - $30,000 = $130,000

Conclusion: The cost of goods sold for the year is $130,000.