Which Ratio Measures How Many Days Inventory Is Held Before

question 1

Multiple Choice

Which ratio measures how many days inventory is held before the final product is sold?

• A) inventory turnover
• B) days' sales in inventory
• C) total asset turnover
• D) inventory intensity ratio

Identify strategies for involving opponents in the decision-making process to secure their commitment.

Understand the basic accounting equation and its components.

Recognize the interrelationships among financial statements.

Appreciate the importance of financial statement notes and disclosures.

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Definitions:

Capital

Financial assets or the financial value of assets, such as cash and goods, used by a business to produce goods or services.

Business Transactions

Economic events that are recorded in the financial statements of an entity because they affect the financial position of the company, involving the transfer of value between two or more parties.

Journal

A chronological record of all financial transactions, used to transfer information to a company's ledger.

Ledger

A book or collection of financial accounts of a particular type, often referred to as the final book of entry where transactions are summarized.