If a Company Uses the Periodic Inventory System, What Is

question 132

Multiple Choice

If a company uses the periodic inventory system, what is the impact on the current ratio of including goods in transit F.o.b. shipping point in purchases, but not ending inventory?

• A) Overstate the current ratio.
• B) Understate the current ratio.
• C) No effect on the current ratio.
• D) Not sufficient information to determine effect on the current ratio.

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Definitions:

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A theory in psychology that emphasizes mental processes such as perception, memory, and problem solving.

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