The Inventory Turnover Ratio Is Represented by Which of the Following

question 203

Multiple Choice

The inventory turnover ratio is represented by which of the following formulas?

• A)net credit sales / average inventory
• B)average inventory / net credit sales
• C)cost of goods sold / average inventory
• D)average inventory / cost of goods sold

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Definitions:

Payback Period

The time it takes for an investment to generate an amount of income or cash equal to the cost of the investment.

Salvage Value

Projected value of an asset for resale once it has concluded its period of effective use.

Installation Costs

Installation costs are expenses associated with setting up or installing equipment, machinery, or other assets so they are ready for use.

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its useful life in equal annual amounts.