Goods available for sale

Definition

Goods available for sale represent the total amount of inventory that a company has ready to be sold during an accounting period. It includes both beginning inventory and any purchases made during the period.

5 Must Know Facts For Your Next Test

1. Goods available for sale is calculated as beginning inventory plus purchases.
2. It serves as a crucial figure in determining the cost of goods sold (COGS).
3. This total can impact financial statements, particularly the balance sheet and income statement.
4. Understanding goods available for sale is essential for applying various inventory valuation methods like FIFO, LIFO, and weighted average.
5. Errors in calculating goods available for sale can lead to inaccurate financial reporting.

Review Questions

Related terms

Beginning Inventory:

The value of inventory that a company starts with at the beginning of an accounting period.

Purchases:

The total cost of additional inventory bought during an accounting period.

Cost of Goods Sold (COGS): The direct costs attributable to the production or purchase of the goods sold by a company.