Question

Beginning inventory plus net purchases is:

A) Ending inventory
B) Cost of goods sold
C) Gross profit
D) Net income

Answer 1

The sum of beginning inventory and net purchases is called the Cost of Goods Sold (COGS). COGS represents the cost incurred by a business to produce or acquire the goods that have been sold during a specific period.

Step-by-step explanation:

The sum of beginning inventory and net purchases is called the Cost of Goods Sold (COGS). COGS represents the cost incurred by a business to produce or acquire the goods that have been sold during a specific period.

COGS is an important figure in calculating a company's net income. It is subtracted from the total revenue to determine gross profit, which is further reduced by operating expenses to arrive at net income.