Inventory Turnover Is Calculated by Dividing the Cost of Goods

question 40

True/False

Inventory turnover is calculated by dividing the cost of goods sold by the average receivables.

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Definitions:

Flat Tax Structure

A tax system with a constant marginal rate, usually applied to individual or corporate income.

Percentage

A ratio or fraction out of 100 that is used to express how large one quantity is relative to another quantity.

Marginal Rate

The rate of increase in a variable (e.g., tax rate, substitution, technical substitution) as another variable (e.g., income, quantity of another good) increases incrementally.

Increase

An upward movement in quantity, value, or some other measure, indicating growth or accumulation.