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Id like to take a moment and explore what happens if we make an error when were measuring our inventory now recall this relationship here and if you like to do it in equation form thats fine if youre a more visual learner thats also fine but you really need to have this equation committed to memory not only for this class but this is going to bleed over into your study of managerial accounting its a fundamental concept beginning inventory plus purchases which we can see right here - your ending inventory equals your cost of goods sold now of course we know beginning inventory plus purchases that is your cost of goods available for sale that we see right here as well thats the total not only pool of dollars now that is associated with the goods we have available for sale but that is the measurement of the maximum amount of things that we could sell now were going to sell some of those and those dollars and things become cost of goods sold and some of them are going to hang aroun