1. The following information was available for Bowyer Company: beginning inventory $90,000; ending inventory $70,000; cost of goods sold $880,000; sales $1,200,000, and net income of $40,000. The companys inventory turnover is

a) 13.5 times.

b) 15.0 times.

c) 9.8 times.

d) 11.0 times.

e) 12.6 times.

2. A low number of days in inventory may indicate

a) All of these

b) None of these

c) there is a relatively low chance that sales opportunities may be lost because of inventory shortages.

d) there is a relatively high chance of inventory becoming obsolete before it can be sold.

e) the company has a relatively small amount of funds tied up in inventory.

3. A company uses the periodic inventory method. An understatement of ending inventory in one period results in

a) no effect on net income of the next period.

b) an overstatement of the ending inventory of the next period.

c) an overstatement of net income of the next period.

d) an understatement of net income of the next period.

e) an overstatement of the beginning inventory of the next period.