Dividing 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.

The gross margin estimation method estimates the cost of goods sold by multiplying the costs to sales ratio by purchases. O multiplying the sales revenue by the inventory turnover ratio. multiplying the cost of goods available by the gross margin percentage. O multiplying the sales revenue by cost-to-sales ratio.

1. Explain the effect of each inventory cost flow method on the company's net income 2. Recommed one method and explain the reasons for your recommendation

First step - you need to understand each individual components of the income statement (also called a Profit & Loss Statement or P&L Statement):  Sales (Revenue)  The sales figure represents the amount of revenue generated by the business. It is calculated as the total of the number of units sold multiplied by the selling price per unit.  The amount recorded here is the total sales, minus any product returns or sales discounts. Cost of Goods Sold This number represents the costs directly associated with making or acquiring your products. Costs include materials purchased from outside suppliers used in the manufacture of your product, as well as any internal expenses directly expended in the manufacturing process. In a service business where you, as the owner, are the only expense in supplying the service, and you do not pay yourself a salary beyond the company profits, your service expense may be zero. However, in a service business where you pay yourself a salary or have…

Accounting for Merchandising Businesses and Inventory and Assets Define the following: Cost of goods sold Credit memo Credit terms Debit memo FIFO FOB Gross profit Invoice LIFO Net sales Periodic inventory Perpetual inventory Sales Selling expense Subsidiary ledger Trade discount Weighted average

Define Inventory turnover ratio.

Under the weighted average cost, when a unit is sold, the average cost of each unit in inventory is assigned to cost of goods sold. True O False

Which of the following statements about FIFO is true? Select one: a. All of the statements are correct b. Cost of goods sold is calculated using the costs of the earliest purchased inventory. c. The value of merchandise inventory is made up of the costs of the most recently purchased inventory. d. Under FIFO, a schedule is used to track the different costs of purchased inventory.

26. Given the following financial data for Alpha Company, calculate the ratios listed below the data. (Compute all ratios and percents to 2 decimal points.) Sales (all on credit) Cost of Goods Sold $650,000 422,500 Income before 78,000 Income Taxes Net Income 54,600 Ending Beginning Balances Balances Cash $19,500 $15,000 Accounts Receivable 65,000 59,800 (net) Merchandise 71,500 66,300 Inventory Plant and Equipment (net) 195,000 183,900 Total Assets $351,000 $325,000 Current $74,100 $100,200 Liabilities Long-Term Notes Payable 97,500 100,000 Stockholders' 179,400 124,800 Equity Total Liabilities and Stockholders' $351,000 $325,000 Equity

A bank that is examining the ratio of annual costs of goods sold to average inventory, is examining which category of ratios?  a.Profit measures b.Operating efficiency measures c.Liquidity measures d.Expense control measures