It can be defined as followed. Cost of purchase without additional costs.
1. Net purchases +? = cost of goods purchased 2. Net purchases = ? + ? = purchases
Cost of sales = opening stock + purchases-closing stock Cost of sales = opening stock + purchases-closing stock
cost
Direct cost of sales is that cost which directly identifiable with sales like purchases etc.
It is a cost account because it is in the cost of merchandise division in the chart of accounts.
1. Net purchases +? = cost of goods purchased 2. Net purchases = ? + ? = purchases
1. Net purchases +? = cost of goods purchased 2. Net purchases = ? + ? = purchases
Yes purchase returns are deducted from purchases to calculate the net amount of purchases and that's why included in cost of sales.
solution in finding the purchases
Cost of sales = opening stock + purchases-closing stock Cost of sales = opening stock + purchases-closing stock
Average of all purchases
cost
Direct cost of sales is that cost which directly identifiable with sales like purchases etc.
The cost of a BMW depends on where one purchases the vehicle,when one purchases it, and sometimes even how one purchases it. Some dealerships sell vehicles cheaper than others, and some offer discounts for different methods of payment.
It is a cost account because it is in the cost of merchandise division in the chart of accounts.
In trading business normally cost of goods sold includes purchases but in manufacturing business cost of goods sold is more than just purchases and included all direct expenses to make products.
purchases+purchases discounts+sales returns and allowances+frieght charges+ begining inventory