The Inventory Turnover Ratio Is Calculated by Dividing the Cost

question 132

Multiple Choice

The inventory turnover ratio is calculated by dividing the cost of goods sold by

• A) beginning inventory.
• B) ending inventory.
• C) average inventory.
• D) number of days in the year.

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Definitions:

External Company

A company that is outside the group of companies to which a particular company belongs, often considered in the context of external audits or partnerships.

Payroll Checks

Checks issued by an employer to pay employees for their services, reflecting gross pay, deductions, and net pay.

Net Pay

The total income of an employee following the subtraction of all deductions, including taxes and retirement fund contributions.

Gross Earnings

The total amount of money earned by an individual or a company before any deductions such as taxes, benefits, or other expenses.