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12th Class Accountancy Accounting Ratios Question Bank MCQs - Accounting Ratios

  • question_answer
    If Opening Inventory is Rs. 1,20,000, Cost of Revenue from Operations is Rs. 10,00,000 and Inventory Turnover Ratio is 5 times, then Closing Inventory will be:

    A) Rs. 3,20,000     

    B) Rs. 2,80,000

    C) Rs. 1,60,000     

    D) Rs. 4,00,000

    Correct Answer: B

    Solution :

    [b] Rs. 2,80,000 Hint Inventory Turnover Ratio =\[\frac{Cost of Revenue from Operations\,}{Average Inventory}\]
    \[5=\frac{10,00,000\,}{Average Inventory}\]
    Average Inventory = Rs. 2,00,000
    Average Inventory =\[\frac{Opening Inventory + Closing Inventory\,}{2}\]
                                \[2,00,000=\frac{1,20,000+\operatorname{CI}\,}{2}\]
    Closing Inventory = Rs. 2,80,000


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