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WAEC Financial Accounting 1994 Question 28

Question 28

Interpretation of Accounts

Rate of stock turnover is defined as

  1. A.purchases over stock
  2. B.cost of goods available for sale over total of opening and closing stock
  3. C.cost of goods available for sale over total of opening and closing stock
  4. D.cost of goods sold over total of opening and closing stock
  5. E.cost of goods sold over average stock.
Show the answer and explanation

Answer: E (cost of goods sold over average stock.)

Explanation

Stock turnover = cost of goods sold ÷ average stock.