--%>
Assignment Help - homework help

Explain Cost of goods

Explain Cost of goods and how they are used in estimating gross profit and net profit of the business?

E

Expert

Verified

Cost of goods sold comprises total cost of opening stock and purchase. When company has incurred certain expenses on purchasing of goods then such expenses are as well comprised in buying goods cost. When there is any closing stock, we can just subtract from above total cost. After this, we can acquire the cost of goods sold. This amount is very significant since devoid of this, we can’t estimate gross profit and net profit of the business.

Cost of goods sold = Opening stock + Net purchase + Direct expenses - closing stock

   Related Questions in Financial Accounting

  • Q : Investment approach of Warren Buffet

    Investment approach of Warren Buffet: According to Benjamin Graham, the father of securities analysis, value investment was the only form of investment which means that purchasing a stock at less than its intrinsic

    		•
  • Q : Ihi Which of the following adjustments

    Which of the following adjustments is an example of an accrual adjustment? an asset/expense adjustment involving depreciation an asset/expense adjustment involving insurance a liability/expense adjustment involving utility expenses a liability/revenue adjustment involving unearned revenues

    		•
  • Q : What are Bad Debts What are Bad Debts

    What are Bad Debts and what are their influence on the value of debtor?

    		•
  • Q : What is Arbitrage Describe the term

    Describe the term Arbitrage.

    		•
  • Q : Creative thinking & Problem solving

    General Instructions: In composing your responses to all tasks, please use full sentences and pay careful attention to spelling, grammar, punctuation, and clarity of expression. Both the content of your work and its present

    		•
  • Q : Fictitious Assets Define the terms

    Define the terms Fictitious Assets?

    		•
  • Q : Factors for surge in the international

    List some factors which are responsible for recent surge in the international portfolio investment (IPI)?

    		•
  • Q : Report on Digital Marketing Strategy

    Working individually you are required to produce a 2000 word report based on promoting the website you developed. (Your main objective is to increase the volume of traffic to your website).You should justify the best digital communication tools and criticall

    		•
  • Q : Creation of North American Trade

    Mr. Ross Perot, former Presidential candidate of the Reform Party, that is the third political party in the United States, had strongly protested in the creation of North American Trade Agreement (NAFTA), however, which was inaugurated in the year 1994, due to fear of

    		•
  • Q : Proceeds on disposal The following

    The following information is taken from the financial statements of an entity: 20x4 20x3 Property, plant and equipment $4,600,000 $4,200,000 Accumulated depreciation (1,800,000) (1,350,000) Depreciation expense 560,000 Gain on disposal of PPE 65,000 The asset disposed of had a cost

    		•