A business has opening inventory of Rs. 40,000, purchases of Rs. 150,000 and closing inventory of Rs. 30,000. What is its cost of goods sold?
Correct answer: C. Rs. 160,000
- A. Rs. 140,000
- B. Rs. 170,000
- C. Rs. 160,000
- D. Rs. 220,000
Explanation
Cost of goods sold equals opening inventory plus purchases less closing inventory. Therefore, Rs. 40,000 + Rs. 150,000 - Rs. 30,000 gives Rs. 160,000.
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About Financial Statements
Financial statements present a business's financial performance and position through the income statement, statement of financial position, cash flow statement and changes in equity. Questions involve preparing and interpreting these statements, adjusting entries, depreciation, closing inventory, accrued and prepaid items, and distinguishing profit from cash flow.
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