Question 2 O Mark this questic Which of the following would explain a company's inventory turnover ratio rising from 1.75 to 3? The company's cost of goods sold has remained constant while the average inventory has increased. The company's cost of goods sold has decreased while the average inventory has remained constant. O The company's cost of goods sold has decreased while the average inventory has increased. The company's cost of goods sold has increased while the average inventory has remained constant.

Question 2 O Mark this questic Which of the following would explain a company's inventory turnover ratio rising from 1.75 to 3? The company's cost of goods sold has remained constant while the average inventory has increased. The company's cost of goods sold has decreased while the average inventory has remained constant. O The company's cost of goods sold has decreased while the average inventory has increased. The company's cost of goods sold has increased while the average inventory has remained constant.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Compute the receivable turnover ratio Also compute the inventory turnover ratio
QUESTION 15 During a period when inventory costs are steadily increasing, which of the following is true? O a. Net income will be higher under LIFO than under FIFO. O b. Cost of goods sold will be lower under LIFO than under FIFO. O c. Ending inventory value will be higher under LIFO than under FIFO. O d. Income taxes will be lower under LIFO than under FIFO.
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What does the inventory turnover period ratio measure? Select one: a.Profitability. b.The average time an organisation holds inventory. c.The liquidity of the firm. d.How much the firm's current assets could decrease and still leave it able to pay its current liabilities.
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21 A company's current ratio is 2.0, and its acid-test ratio is 1.0. How will these ratios be affected if the company pays cash to purchase inventory? The acid-test ratio will decrease, but the current ratio will not change. The current ratio will decrease, but the acid-test ratio will not change. O Both the current and acid-test ratios will decrease. O Neither the current ratio nor the acid-test ratio will change.