Calculating Beginning Inventory: Formula & Explanation

Instructions:

Choose an answer and hit 'next'. You will receive your score and answers at the end.

question 1 of 3

In business accounting, what is the definition of beginning inventory?

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1. Why should the ending inventory of the previous accounting period not just be automatically used as the beginning inventory?

2. What does it mean when the inventory levels change from period to period?

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About This Quiz & Worksheet

Understanding how to determine beginning inventory is an ability necessary for any organization that sells something. This quiz and worksheet will help you understand the definition and significance of beginning inventory, what information is required to determine it accurately, and how to solve it.

Quiz & Worksheet Goals

In this assessment you'll be tested on:

  • The definition of beginning inventory
  • Reasons to use the beginning inventory figure calculation
  • Possible reasons for changes in inventory levels
  • The formula for beginning inventory

Skills Practiced

  • Making connections - use understanding of the concept of beginning inventory
  • Problem solving - use acquired knowledge to solve beginning inventory practice problems
  • Interpreting information - verify that you can read information regarding beginning inventory and interpret it correctly
  • Knowledge application - use your knowledge to answer questions about beginning inventory

Additional Learning

To learn more about beginning inventory, view the accompanying lesson on the Beginning Inventory Formula. This lesson covers the following objectives:

  • Definition of beginning inventory
  • Significance of changes in the inventory levels
  • Necessary variables to calculate inventory changes
  • Formula for beginning inventory
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