The Inventory Turnover Ratio Is Equal to the Average Inventory

question 120

True/False

The inventory turnover ratio is equal to the average inventory balance divided by the cost of goods sold.

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Definitions:

Journal Entry

A record in the accounting books that represents a transaction and its effect on various accounts, typically involving a debit and credit.

Bond Redemption

The process of repaying the principal amount of a bond at or before its maturity date.

Carrying Amount

The value of an asset or liability according to a company's financial statements, minus any depreciation or amortization.

Face Value

The face or monetary value displayed on a financial document like a bond or stock certificate, indicating its official worth.