I am having issue prepearing a trial balance and need some help. On a business that sells merchandise and has cogs- how is that represended on the trial balance because I already have the ending inventory number and the purchased accounts there but what do I need to do with the cogs/?

Quote:

---

Originally Posted by fasb123r

I am having issue prepearing a trial balance and need some help. On a business that sells merchandise and has cogs- how is that represended on the trial balance because I already have the ending inventory number and the purchased accounts there but what do i need to do with the cogs/?

---

Basic accounting tells you that the cost of goods sold is calculated using the opening inventory balance, purchases and the closing inventory balance. These are some of the components of a trading account

Quote:

---

Originally Posted by paraclete

basic accounting tells you that the cost of goods sold is calculated using the opening inventory balance, purchases and the closing inventory balance. These are some of the components of a trading account

---

I agree with you but since the trial balance shows the ending balance of the account for the period and the inventory would show only the end of the period balance then how would you work in the beginning of the inventory? Its here where I have trouble

Quote:

---

Originally Posted by fasb123r

I agree with you but since the trial balance shows the ending balance of the account for the period and the inventory would show only the end of the period balance then how would you work in the beginning of the inventory? its here where i have trouble

---

If you know the ending inventory and the purchases you can calculate the opening inventory because the purchases should not exist in the Trial Balance if you have the ending inventory balance, you must also have other balances that belong in the trading account. So you need to question exactly what the numbers you have represent