JAMB Commerce 2022 Paper

Concept:The result of dividing cost of sales by average stock is a measure of how often stock is sold and replaced in a period.Explanation:Cost of sales (or cost of goods sold) represents the direct cost of goods that were sold during the period.Average stock is the mean value of stock held, usually calculated as $\frac{\text{opening stock} + \text{closing stock}}{2}$.Dividing these gives the rate of turnover:$$\text{Rate of turnover} = \frac{\text{Cost of sales}}{\text{Average stock}}$$This ratio shows the number of times stock is used up or turned over within the accounting period.Answer:C. rate of turnover