Which of the following is false? Select one: a. Day's sales in inventory is equal to the average number of days it takes to sell inventory b. Higher Day's sales in inventory means that inventory is less likely to become obsolete because it is sold in fewer days c. Inventory ratio is equal to the number of times inventory was completely purchased and sold (turn over) during the period d. Inventory turnover ratio is calculated by dividing COGS by the average value of inventory over the period

Q: 7. Inventory turnover a. measures the amount of inventory written off as obsolete. b. is found by…

A: The ratio analysis helps to analyse the different elements of the financial statements of the…

Q: Gross profit will result if: Choose operating expenses are less than net income naging inven sales…

A: Hello. Since your question has multiple parts, we will solve the first question for you. If you want…

Q: Which inventory cost flow assumption generally results in the lowest reported amount for cost of…

A: The answer will be FIFO, First-in, first-out i.e. option B.

Q: Inventory Turnover Ratio shows the speed at which the Sales will be converted into cash. Select one:…

A: The ratio analysis helps to analyse the financial statements of the business.

Q: gross profit method assumes

A: The gross profit technique calculates the value of inventory by combining current period data on net…

Q: Which of the following ratios would a company want to see decrease over time? ROA Days Sales…

A: The statistical assessment of a company's financial success is done through ratio analysis. It…

Q: Gross Margin of a Merchandise Business will be calculated by using which of the following formula?…

A: Introduction: Income statement: All revenues and expenses are shown in income statement. It tells…

Q: Which one of the following statements is true? a. Under conditions of rising prices, the LIFO…

A: Step 1    Last in, first-out (LIFO) is inventory method in which the costs of the most recent…

Q: Compared to using the weighted average cost method to account for inventory, during aperiod in which…

A: First-in-First-Out (FIFO):   In First-in-First-Out method, the costs of the initially purchased…

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.