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Cost of goods sold = Opening inventory + Purchases – Purchase returns (if any) – _________. Select one alternative: Cash Freight costs Closing inventory Discount for early paymen

Cost of goods sold = Opening inventory + Purchases – Purchase returns (if any) – _________. Select one alternative: Cash Freight costs Closing inventory Discount for early paymen

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Cost of goods sold = Opening inventory + Purchases – Purchase returns (if any) – _________.

Select one alternative:

  • Cash
  • Freight costs
  • Closing inventory
  • Discount for early payment
Expert Solution
Step 1

Gross profit means the difference between the sale revenue and cost of goods sold.

Cost of goods means the cost incurred on the goods which has been sold out excluding the cost of closing stock held.

 

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