Question 40 Chapter 4 of +2-B - USHA Publication 12 Class

Question 40 Chapter 4 of +2-B

III. Activity Ratios

Inventory Turnover Ratio

40. (Cost of Goods Sold) If the Inventory turnover ratio is 5 times and the average inventory ₹ 2,00,000. Find out the cost of goods sold (i.e. Cost of Revenue from Operation).

The solution of Question 40 Chapter 4 of +2-B: –

Inventory Turnover Ratio	=	5 Times
Average Inventory	=	₹ 2,00,000

Inventory Turnover Ratio	=	Cost of goods sold
		Average Inventory

5	=	Cost of goods sold
5	=	₹ 2,00,000

Cost of goods sold	=	₹ 2,00,000 x 5
	=	₹ 10,00,000

End of Solution

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Chapter No. 8 – Company Accounts (Share Capital)

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Chapter No. 14 – Accounting Ratios

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