To measure how effectively a client employs its assets,an auditor calculates inventory turnover by dividing the average inventory into:

Question

Quizplus · Accepted Answer

To calculate inventory turnover, we need to divide the cost of goods sold by the average inventory. Therefore, the correct answer is B, cost of goods sold. The other options do not provide the information needed to calculate inventory turnover.

To Measure How Effectively a Client Employs Its Assets,an Auditor