Shared by 
How to unlock this document
Choose the way that suits you. Each one gives you the full document to read online and the PDF to download.
Share your notes, unlock for free
2 free unlocks for every 5 approved uploads
- Upload your own lecture notes, assignments, essays or past papers
- PDF, Word, PowerPoint and Excel files all work, and you can send many at once
- We check each upload; you get a notification when it is approved
- Spend a free unlock on this document or any other, and keep it for good
- Shared under your public username, never your email
Then upload your notes from your profile.
Buy this document
$1 one-time payment
- The full document of this document, yours to keep
- Download the PDF and read it any time, also offline
- No subscription and nothing to cancel
- Find it again any time under My Profile → Library
You log in or create a free account first, then pay securely.
Become a member
Unlock documents from the whole library, which keeps growing
- Choose any documents you like, up to your plan’s unlocks
- Documents you unlock stay yours, even if you cancel later
- Your unlocks start again with every renewal
- Secure checkout by Dodo Payments
You log in or create a free account first, then pay securely.
Compare the plansAlready a member, or bought this before? Log in to open it
About this document
- Pages
- 1 page
- Price
- $1 one-time, yours to keep
- Membership
- Included in every plan
- Format
- Subject
- Accounting, Business
- Module
- Week 4
This document explains how to calculate the cost of goods sold (COGS) and what items make up COGS. It compares periodic and perpetual inventory systems, and discusses how beginning and ending inventory affect COGS. It is for Week 4.
What's inside
- Calculation of cost of goods sold
- Components of cost of goods sold
- Periodic inventory system
- Perpetual inventory system
- Effect of beginning and ending inventory on COGS
Who it is for: Students taking ACC 290. (Undergraduate)
Share with classmates: WhatsApp Telegram X LinkedIn Facebook
Summary
Cost of goods sold is the cost of the items a business has sold. It explains how to calculate it and what affects it.
Cost of Goods Sold
Cost of goods sold is what a business spends to make the products it sells. It is calculated differently depending on the inventory system used. The periodic system calculates it at the end of the period, while the perpetual system does it continuously.
Inventory Systems
The periodic inventory system does not track inventory continuously. It calculates cost of goods sold at the end of the period. The perpetual inventory system tracks inventory continuously and updates cost of goods sold with each sale.
Inventory Effects
Beginning and ending inventory affect cost of goods sold. Beginning inventory is what is left from the previous period. Ending inventory is what is left at the end of the current period.
Inventory Transactions
Transactions like freight costs, returns, and discounts affect inventory. They must be accounted for in the cost of goods sold calculation.
Key terms
- Cost of Goods Sold
- The direct costs of producing the goods sold by a company.
- Periodic inventory system
- A system that calculates cost of goods sold at the end of the period.
- Perpetual inventory system
- A system that continuously tracks inventory and updates cost of goods sold with each sale.
- Beginning inventory
- The inventory at the start of the period.
- Ending inventory
- The inventory at the end of the period.
- Goods available for sale
- The sum of beginning inventory and purchases.
Questions this document helps with
- What is the cost of goods sold?
- How do different inventory systems calculate cost of goods sold?
- How do beginning and ending inventory affect cost of goods sold?
Summary written with AI from the document's text.
Ask the AI Teacher
Ask any question about this document or your course, and get a clear explanation.
Log in to ask Create a free account
Free accounts can ask 5 questions a day.