How To Calculate Purchases Or Inventory Purchases In Accounting
Purchases included both Cash Purchases and Credit Purchases . So, it is the sum of cash purchases and credit purchases. Mathematically, we can show as below: Purchases = Cash Purchases + Credit Purchases The purchases is also called Total Purchases that is a wider term which includes both types of purchases. There is another way to calculate purchases. That is Cost of Sales Formula as shown below: Cost Of Sales = B egi nning Inventory + Purchases - Ending Inventory Purchases = Cost of Sales - B egi nning Inventory + Ending Inventory How to Calculate Purchases Without Beginning Inventory You ca n calculate purchases without beginning or opening inventory if average inventory is given. We know that Average Inventory Formula is as: ...