Q. 70 DK Goel Accounting Ratios Solutions Class 12 CBSE (2024-25)

the solutions of Question number 70 of Accounting Ratios chapter 5 of DK Goel Class 12 CBSE (2024-25)

Calculate Inventory Turnover Ratio from the following:

Opening Inventory ₹ 20,000; Purchases ₹ 2,40,000 and Closing Inventory ₹ 60,000. State, giving reason, which of the following transactions will (a) increase (b) decrease or (c) not alter the inventory turnover ratio.

(i) Goods purchased for ₹ 40,000.

(ii) Sale of goods for ₹ 25,000 (Cost ₹ 30,000)

(iii) Decrease in the value of closing inventory by ₹ 20,000.

(iv) Increase in the value of closing inventory by ₹ 10,000.

(v) Goods costing ₹ 5,000 distributed as free samples.

[Ans. Inventory Turnover Ratio 5 times.]

Solution:-