Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 9 - No. 47)

What is the formula to calculate the average inventory?

Average inventory = (Opening inventory + Closing inventory) / 2

Average inventory = (Opening inventory - Closing inventory) / 2

Average inventory = Opening inventory + Closing inventory

Average inventory = Opening inventory * Closing inventory

The formula is (Opening inventory + Closing inventory) / 2.