Selected Data from the Financial Statements Are Provided in the Following

question 147

Multiple Choice

Selected data from the financial statements are provided in the following table:
$\begin{array}{lrrr}&\text { Year } 3&\text { Year } 2&\text { Year } 1\\\text { Cash } & \$ 44,000 & \$ 28,000 & \$ 14,000 \\\text { Accounts receivable } & 84,000 & 32,000 & 114,400 \\\text { Inventory } & 44,000 & 166,000 & 100,000 \\\text { Prepaid expenses } & 46,000 & 36,000 & 41,600\\\text { Total current assets }&\$218,000&\$262,000&\$270,000\\\\\text { Total current liabilities } & \$ 130,000 & \$ 144,000 \\\text { Net credit sales } & 442,000 & 652,000 \\\text { Cost of goods sold } & 336,000 & 598,000 \\\text { Net cash flows from operating activities } & 32,000 & 58,000\end{array}$
-Refer to the figure Rainsoft Company.Assume that competitors in the industry have an average inventory turnover ratio of 20.8 times in Year 3.What does Rainsoft's inventory turnover ratio for Year 3 indicate about the company?

• A) It has too little inventory on hand at the end of Year 3.
• B) It is pricing its products too low.
• C) It is selling its inventory much more quickly than the industry average.
• D) It may have obsolete inventory or problems with sales.

Comprehend the importance of expectancy, instrumentality, and valence in Vroom's expectancy-valence theory.

Acknowledge the significance of flexible work arrangements and their impact on employee motivation.

Interpret how different motivational theories apply to practical workplace scenarios.

Grasp the legal regulations related to employee benefits and leave policies.

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Definitions:

Allowance for Doubtful Accounts

A contra account that represents the estimated amount of accounts receivable which may not be collectible.

Adjusting Entry

An accounting record made to adjust revenues and expenses to match the accounting period they were incurred, ensuring compliance with the accrual basis of accounting.

Allowance Method

An accounting technique used to estimate uncollectible accounts receivable, acknowledging potential losses on credit sales.

Carrying Amount

The book value of assets and liabilities as reported on the balance sheet, after deducting any accumulated depreciation or amortization.