Accounting Multiple Choice Question – 16 March 2022

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

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A company provides the following information for the year ended 31 May 2021.

  • total purchases – £175,000
  • cash purchases – £35,000
  • inventory 1 June 2020 – £12,000
  • inventory 31 May 2021 – £15 000

What is the rate of inventory turnover (rounded to the nearest whole number)?

Select ONE answer:

  1. 11 times
  2. 12 times
  3. 13 times
  4. 16 times

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

  1. Not correct
  2. Not correct
  3. Correct – COS / Average Inventories ==> (£12,000 + £175,000 – £15,000) / ((£12,000 + £15,000) / 2)
  4. Not correct

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