Days' Sales in Inventory Is Calculated As

question 216

Multiple Choice

Days' sales in inventory is calculated as:

• A) Ending inventory divided by cost of goods sold.
• B) Ending inventory divided by cost of goods sold times 365.
• C) Ending inventory times cost of goods sold.
• D) Cost of goods sold divided by ending inventory times 365.
• E) Cost of goods sold divided by ending inventory.

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Definitions:

Control

In an experiment or study, the standard to which comparisons are made; in management, the process of directing and regulating processes, systems, or organizations.

Net Investment

The aggregate investment in new capital assets less the depreciation charges on the current capital assets.

Gross Investment

The total amount spent on purchases of new capital and on replacing depreciated capital within an economy during a specific period.

Depreciation

The process by which the value of an asset decreases over time, often due to wear and tear or obsolescence.