Q.25) The cost that result when 1 point
a company holds an inventory
of goods for sale is
Answers
Answer:
The cost of goods available for sale equals the beginning value of inventory plus the cost of goods purchased. The cost of goods sold equals the cost of goods available for sale less the ending value of inventory.
Explanation:
CORPORATE FINANCE & ACCOUNTING FINANCIAL STATEMENTS
Inventory
By WILL KENTON
Reviewed By DAVID KINDNESS
Updated Jul 5, 2020
What Is Inventory?
Inventory is the term for the goods available for sale and raw materials used to produce goods available for sale. Inventory represents one of the most important assets of a business because the turnover of inventory represents one of the primary sources of revenue generation and subsequent earnings for the company's shareholders.
Understanding Inventory
Inventory is the array of finished goods or goods used in production held by a company. Inventory is classified as a current asset on a company's balance sheet, and it serves as a buffer between manufacturing and order fulfillment. When an inventory item is sold, its carrying cost transfers to the cost of goods sold (COGS) category on the income statement.