PRC-1 · Chapter 7 · Question 32 of 100
Under a periodic inventory system, how is the 'Cost of Sales' figure derived at the end of the accounting period?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) By adding Opening Inventory and Purchases, then subtracting Closing Inventory.
Explanation
In a periodic system, Cost of Sales is a derived calculation: Opening Stock + Purchases (plus carriage inwards, less returns) - Closing Stock (determined by a physical count).
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