​Which of the following formulae is correct for calculation of 'Cost of Goods Sold' ?

Correct option is A

The correct answer is (a) Opening Stock + Purchases + Direct Expenses - Closing Stock

Explanation:
• Cost of Goods Sold (COGS) represents the total cost incurred to produce goods sold during an accounting period.
• It includes the cost of opening stock, purchases, and direct expenses.
• Closing stock is subtracted because it represents goods not yet sold.

Information Booster:
• COGS is shown on the debit side of the Trading Account.
• Direct expenses include carriage inward, wages, and freight.
• Formula: COGS = Opening Stock + Net Purchases + Direct Expenses - Closing Stock
• Helps determine gross profit or gross loss.
• Gross Profit = Sales - Cost of Goods Sold.