Which of the following is false? Select one: a. Days’ sales in inventory is equal to the average number of days it takes to sell inventory. b. Higher days’ 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 (turned over) during the period. d. Inventory turnover ratio is calculated by dividing COGS by the average value of inventory over the period.
Which of the following is false? Select one: a. Days’ sales in inventory is equal to the average number of days it takes to sell inventory. b. Higher days’ 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 (turned over) during the period. d. Inventory turnover ratio is calculated by dividing COGS by the average value of inventory over the period.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Which of the following is false?
Select one:
a. Days’ sales in inventory is equal to the average number of days it takes to sell inventory.
b. Higher days’ 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 (turned over) during the period.
d. Inventory turnover ratio is calculated by dividing COGS by the average value of inventory over the period.
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