Which of the Following Formulas Is Used to Calculate the Inventory

question 135

Multiple Choice

Which of the following formulas is used to calculate the inventory turnover ratio?

• A) Cost of Goods Sold / Ending Inventory
• B) Sales / Beginning Inventory
• C) Cost of Goods Sold / Average Inventory
• D) Sales / Total Inventory

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Definitions:

Reasonable Assurance

A level of confidence or certainty in the effectiveness of an organization's controls, processes, or systems, without guaranteeing absolute assurance.

Vulnerabilities

Weaknesses in a system or security setup that can be exploited by threats.

Customer's Note

It is a formal promissory note or debt instrument where the customer promises to pay a specific sum of money to the issuer, often used in business as a form of short-term financing.

Bank Statement Adjustment

The process of amending the balance in a company's record of its bank account to match the balance reported on the bank statement, often involving adding or subtracting items like checks or bank charges.