Question

average inventory is calculated using which of the following?
the income statement, balance sheet, and statement of cash flows
beginning inventory at the start of the year and the ending inventory at the end of the year
net income, operating cash flow ratio, profit margin, and the quick ratio

Explanation:

The formula for average inventory is $\frac{\text{Beginning Inventory} + \text{Ending Inventory}}{2}$. So it only requires the beginning and ending inventory (from balance sheets of respective periods), not the full set of financial statements (option A) or profitability/liquidity ratios (option C).

Answer:

B. beginning inventory at the start of the year and the ending inventory at the end of the year