Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

5. Inventory

Inventory Errors

Financial Accounting

5. Inventory

Inventory Errors

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

Which of the following best describes the inventory turnover ratio at a Frito-Lay plant if the cost of goods sold for the year is \$1,200,000 and the average inventory is \$200,000?

1.2 times per year

0.17 times per year

6 times per year

24 times per year

Previous problemNext problem

Verified step by step guidance

Step 1: Understand the inventory turnover ratio formula. The formula is: Inventory Turnover Ratio = Cost of Goods Sold / Average Inventory. This ratio measures how many times a company sells and replaces its inventory during a given period.

Step 2: Identify the values provided in the problem. The cost of goods sold (COGS) is $1,200,000, and the average inventory is $200,000.

Step 3: Substitute the given values into the formula. Using MathML, the formula becomes:

\frac{1200000}{200000}

Step 4: Simplify the fraction to calculate the inventory turnover ratio. Divide the cost of goods sold by the average inventory to determine how many times inventory is turned over during the year.

Step 5: Compare the calculated inventory turnover ratio to the options provided in the problem to determine which one matches the result.