Question Details

The average days to sell inventory is computed by dividing 



1.	The average days to sell inventory is computed by dividing 
a.	365 days by the inventory turnover ratio.
b.	the inventory turnover ratio by 365 days.
c.	net sales by the inventory turnover ratio.
d.	365 days by cost of goods sold.

	2.	The inventory turnover ratio is computed by dividing the cost of goods sold by
a.	beginning inventory.
b.	ending inventory.
c.	average inventory.
d.	number of days in the year.

	3.	Replenish, Inc. develops and produces sports drinks for sale throughout the United States and Europe. The International Accounting Standards Board (IASB) prohibits Replenish, Inc. from using which of the following cost flow assumptions for its inventory?
a.	LIFO (last-in, first-out).
b.	Specific identification.
c.	Weighted-average.
d.	The IASB allows any of these cost flow assumptions as long as the company uses it consistently.

	4.	Which of the following statements is correct regarding International Financing Reporting Standards (IFRS) and U.S. GAAP with regard to inventory?
a.	LIFO (last-in, first-out) is permitted under IFRS but not under U.S. GAAP..
b.	When applying lower-of-cost-or-market, U.S. GAPP defines market as net realizable value.
c.	IFRS permits valuing inventories at fair value, similar to the accounting for property, plant, and equipment.
d.	Under U.S. GAPP, if inventory is written down under lower-of-cost-or-market, it may not be written back up its original cost in a subsequent period.



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