1-Inventory is defined as:

1-Items a company intends for sale to customers.

2-Any assets of the company that can be sold.

3-The amount of cash received from the sale of goods to customers during the year.

4-The cost of goods sold to customers during the year.

2 - A multiple-step income provides the advantage of:

1-Placing all revenues before all expenses.

2-Separating revenues and expenses based on their different types of activities.

3-Placing all revenues after all expenses.

4-Excluding the effects of income taxes in the calculation of net income.

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Net income is defined as:

1-All revenues minus all expenses.

2-Sales Revenue minus Cost of Goods Sold.

3-Gross Profit minus Operating Expenses.

4-Income before Income Tax Expense.

3Fan Company purchases inventory on account. The entry to record this purchase using a perpetual inventory system would include a debit to:

1-Accounts Payable.

2-Inventory.

3-Cost of Goods Sold.

4-Purchases.

4-A companys inventory turnover ratio measures:

1-The profitability on sales of inventory during the year.

2-The number of times the company sells its average inventory balance during the year.

3-The average cost at which inventory was purchased during the year.

4-The quantity of inventory remaining at the end of the year.

5-A companys gross profit ratio measures:

The average amount of sales revenue per unit of inventory sold during the year.

The number of times the company sells its average inventory balance during the year.

The number of days the average inventory is held.

The amount by which the sale of inventory exceeds its cost per dollar of sales.

6-At the beginning of the year, Bryers Incorporated reports inventory of $6,700. During the year, the company purchases additional inventory for $21,700. At the end of the year, the cost of inventory remaining is $8,700. Calculate cost of goods sold for the year.

Use the following information:

Net sales	$	230,000
Cost of goods sold		164,000
Beginning inventory		51,000
Ending inventory		41,000

a. Calculate the inventory turnover ratio. (Round your answer to 1 decimal place.)

b. Calculate the average days in inventory. (Assume 365 days in a year. Round your intermediate calculations and final answer to 1 decimal place.)

c. Calculate the gross profit ratio. (Round your answer to 2 decimal place.)

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