Days' inventory on hand equals 365 divided by
A)inventory turnover.
B)cost of goods sold.
C)goods available for sale.
D)average inventory.

Question

Quizplus · Accepted Answer

Days' inventory on hand is a measure of how long it takes for a company to sell its inventory. It is calculated by dividing the number of days in a year (365) by the inventory turnover ratio. The inventory turnover ratio measures how many times a company's inventory is sold and replaced during a given period. Therefore, choice A is the correct answer.

Days' Inventory on Hand Equals 365 Divided by