The Inventory Turnover Ratio Is Defined As

question 50

Multiple Choice

The inventory turnover ratio is defined as:

• A)The ratio of cost of goods sold to sales
• B)A ratio measuring the sales that are generated per dollar of receivables
• C)A ratio measuring how fast inventory is paid for
• D)A ratio of sales to average inventory

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Definitions:

Cash Generating Units

A segment of a company's operations that independently generates cash flows from its activities.

Carrying Amount

The amount at which an asset is recognized in the balance sheet after deducting any accumulated depreciation (amortization) and accumulated impairment losses.

Value In Use

The value today of the cash flows that are expected to come from an asset or a revenue-producing entity in the future.

Impairment Loss

A reduction in the recoverable value of an asset below its carrying amount on the balance sheet, recognized as a loss.