Day: May 16, 2022

A business has prepared the following information for the year ended 30 April 2021.

• revenue – £220,000
  • opening inventory – £25,000
  • purchases – £120,000
  • closing inventory – (£31,000)
  • cost of goods sold – £114,000
• gross profit – £106,000

What was the inventory turnover?

Select ONE answer:

1. 86 days
2. 90 days
3. 95 days
4. 100 days

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 2

1. Not correct
2. Correct – Average Inventory / COS * 365 Days ==> (25 + 31)/114 * 365
3. Not correct
4. Not correct

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