Rachets R Us Corp

question 52

Multiple Choice

Rachets R Us Corp. reported sales for 2013 of $200,000. Rachets R Us listed $25,000 of inventory on its balance sheet. Using a 365-day year, how many days did Rachets R Us's inventory stay on the premises? How many times per year did Rachets R Us's inventory turnover?

• A) 0.125 days, 8 times, respectively
• B) 0.125 days, 5 times, respectively
• C) 45.625 days, 8 times, respectively
• D) 45.625 days, 5 times respectively

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Definitions:

Scienter

A legal term referring to the knowledge of wrongdoing, particularly the party's intent to deceive or act fraudulently in securities law.

GAAS

Generally Accepted Auditing Standards; guidelines for auditors in the conduct of financial audits.

GAAP

Stands for Generally Accepted Accounting Principles, which are a collection of commonly-followed accounting rules and standards for financial reporting.

Abusive Tax Shelter

Investment schemes that are designed primarily to evade taxes, often by exploiting legal loopholes.