Consider the Following Inventory Data for Two Companies: Which

question 142

Multiple Choice

Consider the following inventory data for two companies: Which of these companies had the higher inventory turnover ratio?

• A)Nichols.
• B)Winters.
• C)The ratios are the same for both companies.
• D)Cannot determine with the information given.

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Definitions:

Accounts Receivable

Amounts owed to a company by its customers for goods or services that have been delivered but not yet paid for.

Accounts Payable

Accounts Payable is a liability account that tracks the amounts a company owes to suppliers or creditors for goods and services received but not yet paid for.

Sales Revenue

The income received by a company from its sales of goods or the provision of services before any costs or expenses are deducted.

Accounts Payable

Liabilities of a business that represent the company's obligation to pay off a short-term debt to its creditors or suppliers.