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Question

Which of the following formulae is correct for calculation of Cost of Goods Sold?

A Opening Stock + Purchases + Direct Expenses – Closing Stock Correct Answer Incorrect Answer
B Sales – Net Profit Correct Answer Incorrect Answer
C Opening Stock + Purchases + Direct Expenses + Closing Stock Correct Answer Incorrect Answer
D Purchases + Direct Expenses Correct Answer Incorrect Answer

Solution

The correct formula to calculate COGS is Opening Stock + Purchases + Direct Expenses – Closing Stock.

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