Under a periodic inventory system, how is COGS determined?

CFA Level 1: COGS Determination in Periodic Inventory System

Prev Question Next Question

Question

Under a periodic inventory system, how is COGS determined?

Answers

A. Ending inventory is counted and subtracted from beginning inventory.

B. Cost of goods sold is accumulated as sales are made.

C. None of these answers is correct.

D. The cost of ending inventory is subtracted from costs of goods available for sale.

Show Answer

Explanations

Click on the arrows to vote for the correct answer

A. B. C. D.

Under the periodic inventory system, only the ending inventory is counted and priced. Cost of goods sold is determined by deducting the cost of the ending inventory from the cost of goods available for sale.

Prev Question Next Question