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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Question
Chapter 15, Problem 5MC
To determine
Identify the option that is divided by cost of goods sold for calculating inventory turnover ratio.
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Which of the statements below is TRUE?
a. Receivables turnover is accounts receivable divided by sales.
b. Inventory turnover is cost of goods sold divided by accounts receivables.
c. Total asset turnover is profits divided by total assets.
d. A higher inventory turnover ratio signifies that inventory is moving faster.
The inventory turnover ratio compares:
A. current assets to inventory.
B. cost of goods sold to inventory.
C. average receivables to inventory.
D. average assets to inventory.
8- Which of the following is the formula to compute inventory turnover?
a)
The formula is cost of goods sold / average inventory
b) O
The formula is net credit sales / average inventory.
The formula is average net accounts receivable / one day's sales.
d)
The formula is net credit sales / average net accounts receivable.
Chapter 15 Solutions
Bundle: College Accounting, Chapters 1-27, Loose-Leaf Version, 22nd + CengageNOWv2, 2 terms Printed Access Card
Ch. 15 - LO1 A multiple-step form of income statement...Ch. 15 - Prob. 2TFCh. 15 - Prob. 3TFCh. 15 - Prob. 4TFCh. 15 - LO4 Accounts receivable turnover is the number of...Ch. 15 - Prob. 1MCCh. 15 - Prob. 2MCCh. 15 - Prob. 3MCCh. 15 - Prob. 4MCCh. 15 - Prob. 5MC
Ch. 15 - Prob. 1CECh. 15 - Prob. 2CECh. 15 - 1. L01 Prepare a multiple-step income statement...Ch. 15 - Prob. 4CECh. 15 - Prob. 5CECh. 15 - Prob. 6CECh. 15 - Prob. 1RQCh. 15 - Prob. 2RQCh. 15 - Describe how to calculate the following ratios (a)...Ch. 15 - Where is the information obtained that is needed...Ch. 15 - Explain the function of each of the four closing...Ch. 15 - What is the purpose of a post-closing trial...Ch. 15 - What is the primary purpose of reversing entries?Ch. 15 - What is the customary date for reversing entries?Ch. 15 - What adjusting entries should be reversed?Ch. 15 - REVENUE SECTION. MULTIPLE-STEP INCOME STATEMENT...Ch. 15 - COST OF GOODS SOLD SECTION, MULTIPLE-STEP INCOME...Ch. 15 - MULTIPLE-STEP INCOME STATEMENT Use the following...Ch. 15 - FINANCIAL RATIOS Based on the financial statements...Ch. 15 - CLOSING ENTRIES From the work sheet on page 600,...Ch. 15 - REVERSING ENTRIES From the work sheet used in...Ch. 15 - Prob. 7SEACh. 15 - INCOME STATEMENT. STATEMENT OF OWNER S EQUITY, AND...Ch. 15 - FINANCIAL RATIOS Use the work sheet and financial...Ch. 15 - WORK SHEET, ADJUSTING, CLOSING, AND REVERSING...Ch. 15 - REVENUE SECTION, MULTIPLE-STEP INCOME STATEMENT...Ch. 15 - COST OF GOODS SOLD SECTION, MULTIPLE-STEP INCOME...Ch. 15 - MULTIPLE-STEP INCOME STATEMENT Use the following...Ch. 15 - FINANCIAL RATIOS Based on the financial...Ch. 15 - CLOSING ENTRIES From the work sheet on page 607...Ch. 15 - Prob. 6SEBCh. 15 - ADJUSTING, CLOSING, AND REVERSING ENTRIES Prepare...Ch. 15 - INCOME STATEMENT, STATEMENT OF OWNERS EQUITY, AND...Ch. 15 - FINANCIAL RATIOS Use the work sheet and financial...Ch. 15 - Prob. 10SPBCh. 15 - Prob. 1MYWCh. 15 - Dominique Fouque owns and operates Dominiques Doll...Ch. 15 - Prob. 1CP
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Similar questions
- LO4 Accounts receivable turnover is the number of times merchandise inventory turned over or was sold during the accounting period.arrow_forwardUse the weighted-average (AVG) cost allocation method, with perpetual inventory updating, to calculate (a) sales revenue, (b) cost of goods sold, and c) gross margin for A75 Company, considering the following transactions.arrow_forwardWhat insights can be gained from inventory ratio analysis, such as inventory turnover ratio and number of days sales in inventory ratio?arrow_forward
- Inventory turnover is computed by dividing cost of goods sold by O 2 x (ending inventory + beginning inventory) O (beginning cost of goods sold + ending cost of goods sold) / 2 O (ending inventory + cost of goods sold) / 2 O (beginning inventory + ending inventory) / 2arrow_forwardDividing cost of goods sold by the average of merchandise inventory is the calculation for the a.accounts receivable turnover. b.merchandise inventory turnover. c.working capital turnover. d.plant and equipment turnover.arrow_forward5. Total goods available for sale is equal to a. the sum of ending inventory and net purchases. b. the sum of beginning inventory and cost of goods sold. c. the sum of ending inventory and cost of goods sold. d. net purchases minus the increase in inventory.arrow_forward
- Which of the following measures the length of time it takes to acquire, sell, and replace inventory? Da. inventory turnover Ob. days' sales in inventory )c. retail method of inventory costing )d. gross profit method of inventory costingarrow_forwardESSAY 1- 3. Are high turnover ratios good or bad? 4 - 6 If company A has accounts receivable turnover of 3.5 while company B has an accounts receivable turnover of 8.1, which is a better conipany? Explain vhy 7-9.What factors affect inventory turnover ratio? Jebt danag the 10 – 12.What factors affect accounts payable turnover ratio?arrow_forwardWhich of the following decreases the cost of inventory purchased? CIRCLE ONE: a. Freight Out b. Freight In C. Purchase allowances d. Payment of accounts payablearrow_forward
- 40) The difference between Net sales and Cost of goods sold is referred as _____________. a. Gross profit b. Income statement c. Balance sheet d. Inventoryarrow_forwardanswer number 6 and number 7arrow_forward1. Journalize the adjustment for inventory shrinkage. 2. Journalize the adjustment for estimated sales returns.arrow_forward
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