The Cost of Sales for a Company Is $400,000 and Its

question 25

Multiple Choice

The cost of sales for a company is $400,000 and its net sales are $800,000. What would its stockturn rate be if its average inventory at cost is $100,000?

• A) 3
• B) 2
• C) 1
• D) 8
• E) 4

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Definitions:

Trial Balance

A financial worksheet that consolidates all ledger balances into equal debit and credit columns for each account.

Journal Entries

Recorded business transactions in the accounting records of a company, listed in the general journal.

Adjusting Journal Entries

Entries made in accounting records at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.

Closing Journal Entries

Entries made in the accounting records at the end of an accounting period to transfer balances from temporary to permanent accounts.