Opening inventory
Opening inventory is the inventory carried into the accounting period from the previous period’s closing statement of financial position. In a simple periodic trading calculation it is added to net purchases to find goods available for sale. Closing inventory is then deducted to identify the cost of goods sold during the period.
Worked example
Opening inventory is $8,000, net purchases are $30,000 and closing inventory is $6,000. Cost of sales is $8,000 + $30,000 − $6,000 = $32,000. These figures assume a simple trading business with no additional inventory-cost adjustments.
Common mistake
Opening inventory is not a new cash purchase this period. An overstatement of opening inventory overstates current-period cost of sales and understates profit, other things equal.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | F1 | Direct | July 2027–August 2028 |
| ACCA | F2 | Direct | July 2027–August 2028 |
| ACCA | F3 | Direct | July 2027–August 2028 |
| ACCA | FA | Direct | September 2026–June 2027 |
| ACCA | K1 | Direct | July 2027–August 2028 |
| CIMA | BA3 | Direct | Official assessment-window verification pending |
| FIA | FFA | Direct | September 2026–June 2027 |
Related terms
Also called: opening stock