Inverntory Turnover ?

Omer AYDINLI

Hi,
I thought that If we are given both opening inventory and closing invontory then use the average
inventories.

Cost of Sales

---

Op.Inv + Cl. Inv. /2

But they`ve used only the closing inventory on BPP`s text book.

Which calculation is correct; use the average invontory or only closing inventory ?

Thanks,
Omer

Nps

If you are asked a question about turnover you will probably only have the end of year figures so there won't be any confusion. I don't recall ever having to use the average for AAT.

Omer AYDINLI

Thanks Nps1976,
I have seen that on my notes. I probabaly misunderstood the tutor.

Nps

No you are right, you can use the average inventory (it would probably give a more realistic answer too) but in the kind of questions at AAT level where you would be asked to calculate turnover, you would probably only be given the end of year figures.