Why this is mistaken
Inventory reconciles purchases and cost transferred out. Accounts Payable reconciles credit purchases and supplier payments. Each number belongs to a different event or timing layer. Use the rollforwards before selecting a ratio numerator.
Where to watch
When this mistake may appear
- An exercise supplies COGS, purchases, and payable balances.
- Credit purchases are absent from public statements.
Check your work
Your work may contain this mistake if:
- Uses COGS as credit purchases without disclosure.
- Calls an Inventory increase a supplier cash payment.