60.1K
Verified Solution
Link Copied!
1.0Days' sales in inventory:
Is also called days' stock on hand
Focuses on average inventory rather than ending inventory
Is used to measure solvency
Is calculated by dividing cost of goods sold by ending inventory
Is a substitute for the acid-test ratio
2. Damaged and obsolete goods:
Are never included in inventory
Are included in inventory at their full cost
Are included in inventory at their net realizable value
Should be disposed of immediately
Are assigned a value of zero
Answer & Explanation
Solved by verified expert
