Ending Inventory is calculated as:

Ending Inventory is calculated as:

• A. Beginning Inventory + Purchases - CoGS.
• B. Beginning Inventory - Purchases + CoGS.
• C. Beginning Inventory + CoGS - Purchases.
• D. Beginning Inventory + Net Purchases - Sales.

Answer: (A)

Ending inventory represents what’s left after the period’s activity: you start with inventory, add what you purchased, then subtract what you sold in terms of cost. So the amount remaining is Beginning Inventory plus Purchases, minus Cost of Goods Sold. This follows the flow: goods available for sale = Beginning Inventory + Purchases, and Ending Inventory = Goods Available for Sale − CoGS, which rearranges to Ending Inventory = Beginning Inventory + Purchases − CoGS. The other options misplace or confuse these components—for example, subtracting purchases ignores what was added, or using Sales instead of CoGS mixes revenue with the cost flow.

Ending inventory represents what’s left after the period’s activity: you start with inventory, add what you purchased, then subtract what you sold in terms of cost. So the amount remaining is Beginning Inventory plus Purchases, minus Cost of Goods Sold. This follows the flow: goods available for sale = Beginning Inventory + Purchases, and Ending Inventory = Goods Available for Sale − CoGS, which rearranges to Ending Inventory = Beginning Inventory + Purchases − CoGS. The other options misplace or confuse these components—for example, subtracting purchases ignores what was added, or using Sales instead of CoGS mixes revenue with the cost flow.