mheducation.com/flow/connect html?isRegetrue&returnuri;:https%3A%2F%2Fconnect m

Question

mheducation.com/flow/connect html?isRegetrue&returnuri;:https%3A%2F%2Fconnect m Study.com Video & hromebook pr Connect (3) History-YouTube Saved Question 1 of 3 All of the following statements are correct regarding inventory shrinkage except: Shrinkage refers to the loss of inventory. Shrinkage can be caused by theft or deterioration. Shrinkage is computed by comparing a physical count of inventory with the recorded amount. Shrinkage is recorded by debiting Cost of Goods Sold All of the statements are correct. submit answer&continue; Slide 6 Prey 5 or11 Score answer

Explanation / Answer

Answer is option (All of the statements are correct)

Explanation;

All given statements are true because inventory shrinkage is a loss of invetory which can be due to theft & deterioration. It is calculated by comparing a physical count of inventory with recorded inventory. This is recorded with the help of debiting cost of goods sold and crediting mercandise inventory. Thus all given statements are correct.

Answer is option (3.50 and 0.90)

Explanation;

Current ratio = Current assets / Current liabilities

Current assets ($52000 + $12000 + $54000 + $325000 + $17500) = $460500

Current liabilities ($106500 + $25000) = $131500

So current ratio = $460500 / $131500 = 3.50

Acid test ratio = Quick assets / Current liabilities

Current assets ($52000 + $12000 + $54000) = $118000

Current liabilities ($106500 + $25000) = $131500

So current ratio = $118000 / $131500 = 0.8973 or 0.90 (Approx.)

Related Questions

Navigate

• Browse (All)
• Browse M
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.