Question : When opening stock is Rs.50,000 closing stock Rs.60,000 and cost of goods sold is Rs.2,20,000, then stock turn over ratio is?
Option 1: 3 times
Option 2: 4 times
Option 3: 2 times
Option 4: 5 times
Answer (1)
25th Jan, 2024
Correct Answer: 4 times
Solution :
Cost of good sold = 2,20,000
Average Inventory = (Opening inventory + Closing inventory) / 2
= (50000+60000) / 2 = 55,000
Inventory turnover ratio= Cost of good sold/ Average inventory
=2,20,000/55,000
=4 Times
Hence the correct answer is option 2.
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