O-LevelAccountingAnalysis and interpretation7707/11 · Oct/Nov 2014 · Q271 Mark

How is rate of inventory turnover calculated?

Acost of goods sold ÷ average inventory

Bcost of goods sold ÷ closing inventory

Csales ÷ average inventory

Dsales + closing inventory

✓ Correct answer

A: cost of goods sold ÷ average inventory

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Topic: Analysis and interpretation, O-Level Accounting (syllabus 7707). Multiple choice, 1 mark.
Source: O-Level Accounting, Oct/Nov 2014 Paper 1 Variant 1, question 27.

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