A company's cost of goods sold was $15,500 and its average merchandise inventory was $4,500. Its inventory turnover equals 3.4.
15,500/4,500 = 3.4

Question

Quizplus · Accepted Answer

The formula for inventory turnover is Cost of goods sold / Average merchandise inventory. By rearranging the formula and substituting the given values, we get 15,500 / 4,500 = 3.4, which matches the given inventory turnover. Therefore, the statement is true.

A Company's Cost of Goods Sold Was $15,500 and Its