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WAEC Financial Accounting 2017 Question 40

Question 40

Interpretation of Accounts

Use the following information (₦): Opening stock 2,300; Purchases 11,874; Sales 18,600; Closing stock 3,000; Cost of goods sold 11,500.
What is the rate of stock turnover?

  1. A.7 times
  2. B.6 times
  3. C.5 times
  4. D.4 times
Show the answer and explanation

Answer: D (4 times)

Explanation

Average stock = (2,300 + 3,000) ÷ 2 = 2,650; 11,500 ÷ 2,650 = 4.3, about 4 times.