CA Foundation · Accounting · Final Accounts of Sole Proprietors
Meera's Business had opening stock of ₹80,000, purchases of ₹2,50,000, and closing stock of ₹95,000. Goods costing ₹15,000 were withdrawn from the business for personal use. What is the cost of goods sold?
COGS is ₹2,30,000 because goods withdrawn for personal use must be subtracted from purchases before deducting closing stock, as they were never sold to customers.
- A₹2,30,000Correct
- B₹2,50,000
- C₹2,45,000
- D₹2,35,000
Explanation
Cost of Goods Sold = Opening Stock + Purchases − Withdrawals − Closing Stock = ₹80,000 + ₹2,50,000 − ₹15,000 − ₹95,000 = ₹2,30,000. Drawings of goods are deducted from purchases as they do not form part of the goods available for sale.
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