How Long a Company Holds Inventory Before Selling It Can

question 150

Multiple Choice

How long a company holds inventory before selling it can be measured by dividing cost of goods sold by the average inventory balance to determine the:

• A) Current ratio.
• B) Price earnings ratio.
• C) Accounts receivable turnover.
• D) Inventory turnover.
• E) Days' sales uncollected.

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Definitions:

Embezzlement

The act of wrongfully appropriating funds or property entrusted to one's care but owned by someone else.

Medical Expenses

Costs incurred for healthcare services, treatments, and procedures to maintain one's health.

Larceny

The unlawful taking of personal property with the intent to deprive the rightful owner of it permanently.

Forgery

The act of falsely making or altering a document with the intent to deceive.