Which of the Following Remains the Same Regardless of the Inventory

question 179

Multiple Choice

Which of the following remains the same regardless of the inventory costing method used by a company? Assume the cost of inventory is rising.

• A) purchases
• B) cost of goods sold
• C) ending merchandise inventory
• D) net income

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Definitions:

Asset Turnover Ratio

A financial metric that measures the efficiency of a company's use of its assets in generating sales revenue.

Assets

Economic resources owned or controlled by an individual or entity that are expected to provide future benefits.

Sales

The process of selling goods or services to customers, typically in exchange for money or other forms of compensation.

Acid-Test Ratio

A financial metric used to gauge a company's liquidity by comparing its most liquid assets, without including inventory, to its current liabilities.