Question

Which of the following measures the relationship between cost of merchandise sold and the amount of inventory carried during the period? a.inventory turnover b.fixed asset turnover c.retail method of inventory costing d.gross profit method of inventory costing

Answer 1

Answer:

The correct answer is A

Explanation:

Inventory turnover is the ratio which shows or states that how many times, the company has sold or replaced the inventory during a stated year or period. This ratio is stated as a formula which is to divide the number of days in the year with the formula of inventory turnover in order to compute the days it will take for selling the inventory.

So, this is the one which tells the relationship among the cost of the merchandise sold and the amount of the inventory which is carried during the year.