Accounting Multiple Choice Question – 16 March 2022

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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