Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 19 - No. 31)

In the context of the provided text regarding financial statements, what does 'average inventory' represent?
(Opening Inventory + Closing Inventory) / 2
Opening Inventory - Closing Inventory
Closing Inventory
Opening Inventory

Explanation

Average inventory is calculated by (Opening Inventory + Closing Inventory) / 2.

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