Very high inventory turnover ratio relative to industry norms could possiblyindicate the company does not carry adequate inventory, so shortages couldpotentialy hurt reverue. Select one: True False

The objective of the question is to understand the implications of a very high inventory turnover…

Answered: Very high inventory turnover ratio…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Are you correct that, by using LIFO, Kroger reports lower inventory and lowerprofits? Why would Kroger do that?
B-Marts' large proportion of merchandise held on consignment from suppliers. Which account balance assertion for inventory would this cause to be most at risk? Select one: a.Presentation. b.Cut-off . c.None of the given answers is correct. d.Existence.
s
Retailers need merchandise to make sales. In fact, a retailer’s inventory is its biggest asset. Not stocking enough merchandise can result in lost sales, but carrying too much inventory increases costs and lowers margins. Both circumstances reduce profits. One measure of a reseller’s inventory management effectiveness is its stockturn rate (also called inventory turnover rate for manufacturers). The key to success in retailing is realizing a large volume of sales on as little inventory as possible while maintaining enough stock to meet customer demands. Refer to Appendix 2: Marketing by the Numbers, and determine the stockturn rate of a retailer carrying an average inventory at cost of $350,000, with a cost of goods sold of $800,000. If this company’s stockturn rate was 3.5 last year, is the stockturn rate calculated above better or worse? Explain.
Which of the following is correct about the Limitations of accounting? Select one: O a. Accounting not looks at quality aspect b. there is no bias in accounting c. Price level changes consider in accounting O d. none of the options are correct
Retailers need merchandise to make sales. In fact, a retailer’s inventory is its biggest asset. Not stocking enough merchandise can result in lost sales, but carrying too much inventory increases costs and lowers margins. Both circumstances reduce profits. One measure of a reseller’s inventory management effectiveness is its stockturn rate (also called inventory turnover rate for manufacturers). The key to success in retailing is realizing a large volume of sales on as little inventory as possible while maintaining enough stock to meet customer demands. Determine the stockturn rate of a retailer carrying an average inventory at cost of $850,000, with a cost of goods sold of $1,800,000.
Darlington Company experienced the following business events during its first month of operations. The company uses the perpetual Inventory system. 1) The company purchased $14,400 of merchandise on account under terms 2/10, n/30. 2) The company returned $3,100 of merchandise to the supplier before payment was made. 3) The llability was paid within the discount period. 4) All of the merchandise purchased was sold for $22,600 cash. What is the net cash flow from operating activities as a result of the four transactions? Multiple Choice $11,526 $11,074 $5,100 $8,200
What is the main criticism of LIFO? A. It presents a balance sheet figure that is out-of-date. B. It artificially creates a higher income. C. It utilizes a unit cost that has no evidence of existence. D. It is often complicated to implement, especially if inventory costs change frequently.
Which of the following statements is not incorrect? I. PAS 2 requires the use of the Allowance Method in accounting for inventory write-down. II. There shall always be an allowance for inventory write-down if the net realizable value of inventories is lower than its cost. III. Regardless of what method the company uses in accounting for inventory write-down, the cost of goods sold must always be the same IV. A company may recognize a gain on reversal of inventory write-down even if the cost of inventory exceeds its net realizable value. a. I and II b. None of these c. II and III d. III and IV e. I and IV
A firm that uses LIFO accounting for inventory in times of rising investory costs will always report lower profit margins than if it used FIFO. Is this correct?
Give correct answer with explanation .
I need help

SEE MORE QUESTIONS

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS

Very high inventory turnover ratio relative to industry norms could possibly indicate the company does not carry adequate inventory, so shortages could potentialy hurt reverue. Select one: True False