O-LevelAccountingAnalysis and interpretation7707/11 · May/June 2010 · Q281 Mark

What is the formula for calculating rate of inventory (stock) turnover?

Acost of sales / (opening stock less closing stock) ÷ 2

Bcost of sales / (opening stock plus closing stock) ÷ 2

Cpurchases / (opening stock less closing stock) ÷ 2

Dpurchases / (opening stock plus closing stock) ÷ 2

✓ Correct answer

B: cost of sales / (opening stock plus closing stock) ÷ 2

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Topic: Analysis and interpretation, O-Level Accounting (syllabus 7707). Multiple choice, 1 mark.
Source: O-Level Accounting, May/June 2010 Paper 1 Variant 1, question 28.

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