Certainly! Here are the correct statements regarding the relationship of ending inventory and beginning inventory:
1. The ending inventory of the previous period is the beginning inventory of the current period.
This statement is correct because the inventory that is left over at the end of one period (ending inventory of the previous period) becomes the starting inventory for the next period (beginning inventory of the current period). This ensures a continuous flow of inventory management and tracking from one period to the next.
2. The beginning inventory of the current period is the beginning inventory of the previous period.
This statement is incorrect as it doesn't reflect the flow of inventory between periods. The beginning inventory of the current period is the starting point for the current period and is not directly linked to the beginning inventory of the previous period.
By understanding this relationship, businesses can effectively track and manage their inventory levels over time, ensuring accurate financial reporting and efficient operations.
