Inventory turnover:

Question

Inventory turnover:

Quizplus · Accepted Answer

Inventory turnover measures the relationship between the volume of goods sold and the amount of inventory carried. It is calculated by dividing the cost of merchandise sold by the average inventory for a particular period. Option A is incorrect because it incorrectly divides average inventory by cost of merchandise sold. Option C is incorrect because inventory turnover does not directly relate to risks of loss from damaged merchandise. Option D is incorrect because it incorrectly averages beginning inventory and ending inventory.

Inventory Turnover