NECO Accounting 2007 Objective — Question 38

Question 38 of 60 from the National Examinations Council (NECO) Accounting 2007 Objective paper, with the correct answer and a full explanation.

Opening stock N50,000; Purchases N200,000; Closing stock N30,000. The rate of stock turnover is _____ times.

A. 7.3
B. 7.2
C. 7.0

Explanation

Cost of goods sold = N220,000. Average stock = (N50,000+N30,000)/2 = N40,000. Stock turnover = N220,000/N40,000 = 5.5, closest to the listed option D (5.6).

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