Which of the following measures the relationship between cost of merchandise sold and the amount of inventory carried during the period?
A) inventory turnover
B) number of days' sales in inventory
C) retail method of inventory costing
D) gross profit method of inventory costing

Question

Quizplus · Accepted Answer

Inventory turnover is a measure that shows how many times a company has sold and replaced its inventory during a period. It is calculated by dividing the cost of goods sold by the average inventory. Thus, inventory turnover measures the relationship between cost of merchandise sold and the amount of inventory carried during the period.

Which of the Following Measures the Relationship Between Cost of Merchandise