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    xquisity's Avatar
    xquisity Posts: 1, Reputation: 1
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    #1

    Jul 23, 2009, 10:23 PM
    Cost of Goods Sold/Ending Inventory
    Hello,

    I need help understanding cost of goods sold. I know that one of the equations I could use to figure out the problem is Cost of goods available minus ending inventory, but what confuses me is finding the ending inventory when using the perpetual inventory system. I have been sitting down since this morning trying to figure it out, looking through my textbook and online for examples to follow since I'm a visual learner. But the problem is even the examples don't explain much and I am back at square one, maybe I am calculating everything wrong I am not sure but I was just wondering if someone could at least explain it to where it will start making more sense.

    Thank you :confused:
    morgaine300's Avatar
    morgaine300 Posts: 6,561, Reputation: 276
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    #2

    Jul 23, 2009, 10:31 PM

    Almost by definition, if you're doing perpetual, you don't have to "find" ending inventory. Perpetual means that you are continually updating the inventory -- adding to it when you purchase something, and subtracting it off when you sell something and it goes away. So when you reach the end of the month, you should already have your ending inventory.

    I'm suspecting it's actually something else you are not understanding. Perhaps if you elaborated a bit more..
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