The Cost of Goods Sold Divided by the Average Inventory

question 43

Multiple Choice

The cost of goods sold divided by the average inventory equals the

• A) gross profit on operations.
• B) beginning inventory value.
• C) merchandise inventory.
• D) ending inventory value.
• E) inventory turnover.

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Definitions:

Ending Equity

The value of an owner's interest in a company after all liabilities have been subtracted from the company’s assets at the end of an accounting period.

Accounts

Financial records that track the transactions related to a specific asset, liability, equity, revenue, or expense. These are fundamental components of the accounting system used to compile financial statements.

Accounting Equation

The foundational equation in accounting, Assets = Liabilities + Equity, representing the relationship between a company's resources and claims on those resources.

Sole Stockholder

An individual or entity that owns 100% of the shares of a corporation, holding complete control.