Explain why a decrease in inventory means that cash paid for inventory during a period is less

Question:

Explain why a decrease in inventory means that cash paid for inventory during a period is less than the amount of inventory expensed.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Financial Accounting A Critical Approach

ISBN: 978-1259066528

4th edition

Authors: John Friedlan

See More Books

Question Posted: Feb 26, 2015 12:14 PM

See More Questions

Why is a decrease in inventory shown as an increase in cash when computing cash flow from operations?
Explain why a decrease in the price of foreign oil shifts the aggregate supply curve outward to the right. What are the consequences of such a shift?
Explain why the forward interest rate is less than the corresponding futures interest rate calculated from a Eurodollar futures contract.
The system shown consists of 3 cables. For example; cable C12 joins points 1 and 2. The coordinates of point 1 are (6.4, 0, 0) m, those of point 2 are (0, 9.5, -6.1) m, and those of point 3 are (0,...
What are some of reasons that an items pocket price may not be the same as the items invoice price? What could be done about this?
Explain what is meant by the fiscal year and the natural business year. AppendixLO1
Listen-and-look study. Where do you look when you are listening to someone speak? Researchers have discovered that listeners tend to gaze at the eyes or mouth of the speaker. In a study published in...
1. Why might a structured organizational assessment framework be a useful tool in identifying the issues in a situation like the one presented in the Whispering Pines case? (LO 1 and LO 5) 2. What...
Exercise 8-18 Complete the accounting cycle (LO8-1, 8-2, 8-4, 8-6) [The following information applies to the questions displayed below.) On January 1, 2021, the general ledger of ACME Fireworks...
A manufacturing company produces steel housings for electrical equipment. The main component part of the housing is a steel trough that is made out of a 14- gauge steel coil. It is produced using a...
Assuming inventory is paid for in cash, explain why an increase in accounts receivable means that cash collected during a period is less than the amount of revenue recognized.
How can managers' decisions affect an entity's cash flow and cash from operations? How are these decisions different from managers' ability to influence accrual financial statements?
To ensure that its employees did not use illegal drugs in or outside the workplace, Marvel Grocery Store required all employees to take a polygraph exam. Moreover, managers began to check employees'...
What Is Chemical Energy? Definition and Examples
The fundamental concern of computer science is determining what can and cannot be automated. The earliest foundations of what would become computer science predate the invention of the modern digital...
History of the United States
United States History Pearl Harbor attack
Use the information in E13-3 to complete the following requirement. Required: Compute the times interest earned ratios for 2008 and 2007. In your opinion, does Computer Tycoon generate sufficient net...
You purchase a bond with a coupon rate of 6.7 percent, a par value $1,000, and a clean price of $905. Assume a par value of $1,000. If the next semiannual coupon payment is due in two months, what is...
Akaya Dawson is the Chief Operating Officer at Mercy Hospital in Atlanta, Georgia. She is analyzing the hospitals overhead costs but is not sure whether nursing hours or the number of patient days...
Swiss Group reports net income of $40,000 for 2013. At the beginning of 2013, Swiss Group had $200,000 in assets. By the end of 2013, assets had grown to $300,000. What is Swiss Groups 2013 return on...
Nintendo Company reports the following income statement accounts for the year ended March 31, 2011. (Japanese yen in millions.) Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....
The following financial statement information is from five separate companies: Required 1. Answer the following questions about Company A: a. What is the amount of equity on December 31, 2012? b....
Chapter o Homew ebook 50,000-unit production quantity: $ 227,049 7 70,000-unit production quantity: $ 66,751 d. In addition to mean profit, what other factors should FTC consider in determining a...
Diamond makes downhill ski equipment. Assume that comic has offered to produce ski poles for Diamond for $20 per pair Diamond needs 200,000 pairs of poles per period Diamond can only avoid 5150,000...
17? Which of the following statement is true Select one: a. All evidence must have the same level of reliability b. All evidence must have the same level of persuasiveness C. All are false d....

Explain why a decrease in inventory means that cash paid for inventory during a period is less

Question:

Step by Step Answer:

Inventory decreases when inventory is sold but not repl...View the full answer

Financial Accounting A Critical Approach

Students also viewed these Managerial Accounting questions