Which statement defines closing inventory?

Which statement defines closing inventory?

• A. The value of food existing at the start of the period
• B. The value of food existing at the end of the period
• C. The total purchases during the period
• D. The cost of sales for the period

Answer: (B)

Closing inventory is the value of food and supplies that remain on hand at the end of the period. It represents the stock still available after all usage and sales have been accounted for, and it sits as a current asset on the balance sheet. It’s also used in the cost of goods sold calculation: opening inventory plus purchases during the period minus closing inventory equals cost of goods sold. This is why the end-of-period stock is the defining measure of closing inventory—it reflects what you still have rather than what you started with, what you purchased, or what you sold.

Closing inventory is the value of food and supplies that remain on hand at the end of the period. It represents the stock still available after all usage and sales have been accounted for, and it sits as a current asset on the balance sheet. It’s also used in the cost of goods sold calculation: opening inventory plus purchases during the period minus closing inventory equals cost of goods sold. This is why the end-of-period stock is the defining measure of closing inventory—it reflects what you still have rather than what you started with, what you purchased, or what you sold.