Wiseman Bookstores Has an Accounts Receivable Turnover of 12

question 56

Multiple Choice

Wiseman Bookstores has an accounts receivable turnover of 12.This means that

• A) the company sells and replaces its merchandise inventory twelve times each year.
• B) one-twelfth of the company's assets are financed by creditors.
• C) the company's sales figure is twelve times its accounts receivable figure.
• D) the company collects its accounts receivable about every thirty days.
• E) the company had $12 in assets for every $1 of current liabilities.

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Definitions:

FIFO Method

An inventory valuation method that assumes the first items placed in inventory are the first sold, hence "First In, First Out."

Cost of Goods

The total direct costs attributable to the production or purchase of goods sold by a company, including materials and labor.

Completed and Transferred

A term used in manufacturing to describe goods that have been finished and moved to the next stage of production or to inventory.

Cost of Production Report

A cost of production report summarizes the production and cost activity within a manufacturing department for a specific period, tracking the flow of units and the accumulated costs.