Bundle: College Accounting, Chapters 1-27, Loose-Leaf Version, 22nd + CengageNOWv2, 2 terms Printed Access Card
22nd Edition
ISBN: 9781305930421
Author: James A. Heintz, Robert W. Parry
Publisher: Cengage Learning
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Chapter 13, Problem 4TF
LO3 A fiscal year that starts and ends at the time the stock of goods is normally at its lowest level is known as a natural business year.
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What is the ratio that measures the number of days on average the company takes to turn its inventory into sales?
Days sales outstanding
Days inventory outstatnding
Days payable outstatnding
Days order outstanding
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. 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
Chapter 13 Solutions
Bundle: College Accounting, Chapters 1-27, Loose-Leaf Version, 22nd + CengageNOWv2, 2 terms Printed Access Card
Ch. 13 - An overstatement of ending inventory in the year...Ch. 13 - An understatement of ending inventory in the year...Ch. 13 - LO2 Under the perpetual system of accounting for...Ch. 13 - LO3 A fiscal year that starts and ends at the time...Ch. 13 - LO3 If goods are shipped FOB shipping point, the...Ch. 13 - An understatement of ending inventory in the year...Ch. 13 - Prob. 2MCCh. 13 - In rimes of rising prices, the inventory cost...Ch. 13 - In rimes of rising prices, the inventory cost...Ch. 13 - In the application of lower-of-cost-or-market,...
Ch. 13 - LO1 If the ending inventory is overstated by...Ch. 13 - Using the following information, compute the...Ch. 13 - Use the following information to compute cost of...Ch. 13 - Kulsrud Company would like to estimate the current...Ch. 13 - What financial statements are affected by an error...Ch. 13 - What is the main difference between the periodic...Ch. 13 - Is a physical inventory necessary under the...Ch. 13 - Is a physical inventory necessary under the...Ch. 13 - In a period of rising prices, which inventory...Ch. 13 - What two factors are taken into account by the...Ch. 13 - Which inventory method always follows the actual...Ch. 13 - When lower-of-cost-or-market is assigned to the...Ch. 13 - List the three steps followed under the gross...Ch. 13 - List the five steps followed under the retail...Ch. 13 - INVENTORY ERRORS Assume that in year 1, the ending...Ch. 13 - JOURNAL ENTRIESPERIODIC INVENTORY Paul Nasipak...Ch. 13 - JOURNAL ENTRIESPERPETUAL INVENTORY Joan Ziemba...Ch. 13 - ENDING INVENTORY COSTS Sandy Chen owns a small...Ch. 13 - LOWER-OF-COST-OR-MARKET Stalberg Companys...Ch. 13 - SPECIFIC IDENTIFICATION, FIFO, LIFO, AND...Ch. 13 - COST ALLOCATION AND LOWER-OF-COST-OR-MARKET...Ch. 13 - Prob. 8SPACh. 13 - RETAIL INVENTORY METHOD The following information...Ch. 13 - INVENTORY ERRORS Assume that in year 1, the ending...Ch. 13 - JOURNAL ENTRIESPERIODIC INVENTORY Amy Douglas owns...Ch. 13 - JOURNAL ENTRIESPERPETUAL INVENTORY Doreen Woods...Ch. 13 - ENDING INVENTORY COSTS Danny Steele owns a small...Ch. 13 - LOWER-OF-COST-OR-MARKET Bouie Companys beginning...Ch. 13 - SPECIFIC IDENTIFICATION, FIFO, LIFO, AND...Ch. 13 - COST ALLOCATION AND LOWER-OF-COST-OR-MARKET Hall...Ch. 13 - GROSS PROFIT METHOD A flood completely destroyed...Ch. 13 - RETAIL INVENTORY METHOD The following information...Ch. 13 - Hurst Companys beginning inventory and purchases...Ch. 13 - Bhushan Company has been using LIFO for inventory...
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- When analyzing financial statements, what can you conclude when the inventory turnover ratio increases from 4.0 to 6.0 over a three year period. Group of answer choices a. The day’s inventory held are within the typical industry average b. The day’s inventory held has increased over time None of the above c. The day’s inventory held has decreased over timearrow_forwardAn analyst observes a decrease in a company’s inventory turnover. Which of the following would most likely explain this trend? B . Due to problems with obsolescent inventory last year, the company wrote off a large amount of its inventory at the beginning of the period.arrow_forwardDetermine (a) the inventory turnover and (b) the number of days' sales in inventory. Round interim calculations to the nearest dollar and final answers to one decimal place. Assume 36! days a year. a. Inventory turnover b. Number of days' sales in inventory daysarrow_forward
- Sh18arrow_forward3arrow_forwardWhich of the following is false? Question 33 options: a) Inventory turnover ratio is calculated by dividing COGS by the average value of inventory over the period. b) Inventory ratio is equal to the number of times inventory was completely purchased and sold (turned over) during the period. c) Higher days' sales in inventory means that inventory is less likely to become obsolete because it is sold in fewer days d) Days' sales in inventory is equal to the average number of days it takes to sell inventory.arrow_forward
- 6 Which of the following will increase the cash conversion cycle? ay an increase in inventory turnover a. b. an increase in accounts receivable turnover an increase in accounts payable turnover C. noie d. a decrease in average age of inventory 1owene moy of ebnoqunoo h l oh obiond 7. Operating cycle measures a, the time that elapses from the firm's receipt of raw materials until it pays for those materials bohsa yionni b. the time that elapses from the payment of raw materials until the firm is paid for its finished product c. the time that elapses from the firm's receipt of raw materials to begin production to its collection of cash from the sale of the finished product d. none of the above o la brlisaib15 0 albfieshtbeibrog tU nM s irionary and motives bo g sldsysg zonuoon d lliw sbyo 8. Operating cycle comprises of in a. the average age of inventory b. the average age of receivables ebyo gabso 21i as dagnol smsa of receivables less the average age of c. the average age of inventory…arrow_forward37 [Question text] The length of time between the purchase of inventory and the receipt of cash from the sale of that inventory is called_________________________. Select one: A. accounts payable period B. inventory period C. operating cycle D. accounts receivable periodarrow_forward21arrow_forward
- Question no 6 Errors occasionally occur when physically counting inventory items on hand. Identify the financial statement effects of an overstatement of the ending inventory in the current period. If the error is not corrected, how does it affect the financial statements for the following year? How is it possible for a company to suffer a net loss for a given year, yet produce a positive net cash flow from operating activities?arrow_forwardQUESTION 30 Sales revenues of a utility for a certain fiscal period Are equivalent to total debits to Customer Accounts Receivable for that period Include receivables billed during a fiscal period, plus receivables billed early in the next year if metere were read before year-end Include billed receivables plus accrued revenues at year-end for unbilled receivables, reduced by accrued revenues front the beginning of the year Include billed receivables less accrued revenues at year-end for unbilled receivables increased by accrued revenues from the beginning of the yeararrow_forward12. Ferris Corp. wants to increase its current ratio from the present level of 1.5 when it closes the books next week. The action of will have the desired effect. O A. payment of current payables from cash O B. sales of current marketable securities for cash D. delay of next payroll O E. None of these is correct.arrow_forward
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