CFA Practice Question

There are 520 practice questions for this study session.

CFA Practice Question

At year-end, all costs of goods available for sale either become cost of goods sold or ending inventory. True or False?
Correct Answer: True

Cost flow assumptions are different methods of allocating historical costs. Each assumption allocates different amounts to ending inventory, so that different amounts result in cost of sales. However, the sum of the two amounts is always the cost of goods available for sale.

User Contributed Comments 2

User Comment
vatsal92 It means either inventory is COGS or Closing stock.
kieranjh don't the goods have to actually be sold to be COGS? it seems logical that an unsold good is just inventory.
You need to log in first to add your comment.