Answer the following statements true (T) or false (F)
1) The days' sales in inventory ratio is calculated by dividing cost of goods sold by the average merchandise inventory.
2) A higher days' sales in inventory is preferable.
3) Accounting is simpler in a periodic inventory system because the company keeps a daily running record of inventory on hand.
4) The periodic inventory system works well for small businesses in which the inventory is not large in size or dollar amounts.
5) For all four inventory costing methods, cost of goods sold is always equal to the sum of beginning inventory plus net purchases.
1. FALSE
2. FALSE
3. FALSE
4. TRUE
5. FALSE
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