Inverntory Turnover ?

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Omer AYDINLI
Omer AYDINLI Registered Posts: 19 Dedicated contributor 🦉
in AAT Level 4 (Level 8 in Scotland)
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

Comments

  • Nps
    Nps Registered Posts: 782
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    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
    Omer AYDINLI Registered Posts: 19 Dedicated contributor 🦉
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    Thanks Nps1976,
    I have seen that on my notes. I probabaly misunderstood the tutor.
  • Nps
    Nps Registered Posts: 782
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    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.

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