Question

Difference between Beginning and Ending Inventory

Forum|Forum|6 years ago
October 10, 2019
1 reply
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Why is the difference added to the Gross profit if inventory is an asset?

@vaccarok1 wrote:
Why is the difference added to the Gross profit if inventory is an asset?

It is not clear as to what you are referring.

Gross receipts (gross sales) and gross profit are generally different. The cost of goods sold is subtracted from gross receipts to arrive at the gross profit figure. Beginning inventory plus purchases less ending inventory equals the cost of goods sold.