Which of the Following Is the Result of Cost of Goods

question 41

Multiple Choice

Which of the following is the result of cost of goods sold divided by average inventory?

• A) Current ratio
• B) Gross profit percentage
• C) Debt ratio
• D) Rate of inventory turnover

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Definitions:

Sunk Cost

A cost that has already been incurred and cannot be removed and therefore should not be considered in an investment decision.

Straight-Line Depreciation

A method of allocating an asset's cost evenly over its useful life, resulting in a consistent depreciation expense each year.

Operating Costs

Expenses associated with the day-to-day functions of a business, excluding costs related to production or acquisition of goods.

Rate of Return

The percentage gain or loss on an investment over a specified time period.