The Ratio of Total Purchases to Sales (The Percentage of Dollars

question 2

True/False

The ratio of total purchases to sales (the percentage of dollars paid out to suppliers as a percentage of sales)varies little from industry to industry.

---

Definitions:

Inventory Account

An account used to record the value of inventory held by a company, including raw materials, work-in-progress, and finished goods.

Cost of Goods Available

The total cost of goods a company has to sell during a specific period, calculated by adding the beginning inventory to the cost of goods purchased.

Purchase Returns

Refers to the process of returning goods previously bought to the supplier due to various reasons like defects or dissatisfaction.

Freight-In

The cost associated with transporting goods into a business, which is often added to the cost of inventory.