Which equation represents how to determine Ending Inventory?

The equation that is used to determine Ending Inventory is represented by the formula: Ending Inventory = Goods Available for Sale - Cost of Goods Sold. This equation is fundamental in inventory management and accounting, allowing businesses to track the value of inventory they still have on hand after accounting for sales made during a specific period.

To break it down:

1. Goods Available for Sale refers to the total inventory available for sale during a period, which includes the Beginning Inventory plus any Purchases made during that period.

2. Cost of Goods Sold (COGS) represents the direct costs attributable to the goods sold during the period, reflecting how much inventory was sold.

By subtracting the Cost of Goods Sold from the Goods Available for Sale, we determine how much inventory remains—this is the Ending Inventory. Therefore, this formula is essential for businesses to evaluate their stock levels and make informed purchasing and sales decisions.

In contrast, while other equations touch on related concepts of inventory and sales, they do not directly provide a valid calculation for determining Ending Inventory. For example, the other options involve elements of the inventory equation but do not effectively isolate or clarify how to arrive at Ending Inventory in a straightforward manner.