ACCA FR · Chapter 14 · Question 11 of 15
Klipspringer Co has closing inventory of $120,000 and cost of sales of $876,000 for the year. Using a 365-day year, what is its inventory holding period?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) 50 days
Explanation
Inventory holding period = inventory / cost of sales x 365 = $120,000 / $876,000 x 365 = 50 days. Inventory turnover = 7.3 times a year is a related measure, but it is not expressed in days.
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