CC111:DL-Spring 2018 Subscriptions / Courses / ACC111:DL-Spring 2018 / Chapter 6

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CC111:DL-Spring 2018 Subscriptions / Courses / ACC111:DL-Spring 2018 / Chapter 6 / Exam 3 Chapter 5 and 6 QUESTION 17 Not yet answered Points out of 3.00 P Flag question A firm's inventory turnover: Select one: A. Is generally interpreted as favorable if It is smaller than the industry average B. Is affected by the inventory costing method used C. Is computed by dividing cost of goods sold by the end-of-year inventory D. Becomes the days' sales in inventory when multiplied by 365 Save Answers Previous page

Explanation / Answer

Answer : C. is computed by dividing cost of goods sold by the end-of-year inventory.

=> The inventory turnover = Cost of Goods Sold / End of period Inventory balance. This shows "how many times the inventory has been rotated in the period to generated the net income."

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