Cycle Counting Is a Physical Inventory-Taking Technique in Which Inventory

question 58

True/False

Cycle counting is a physical inventory-taking technique in which inventory is counted on a frequent basis rather than once or twice a year.

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Definitions:

Days' Sales

A financial metric that calculates the average time it takes for a company to convert its inventory into sales.

Inventory

The total amount of goods, raw materials, and finished products that a business has on hand at any given time.

Overstated Inventory

A situation where the book value of inventory is recorded higher than its actual physical count or market value, potentially misleading financial statements.

Owner's Equity

The residual interest in the assets of a business after all liabilities are deducted, often considered the net worth of a business.