which-of-the-following-indicates-a-positive-trend-for-inventory-management-a-increasing-number-of-da

Question

Which of the following indicates a positive trend for inventory management?
A. increasing number of days’ sales in inventory ratio
B. increasing inventory turnover ratio
C. increasing cost of goods sold
D. increasing sales revenue

Puneet Prajapati · Accepted Answer

this will be even understand. Because it for by the people in this dark there is. And you did steaks 12 here. So we will start with our example. That&#x27;s a supposed dating Mr. See you. They didn&#x27;t miss that by now. Mr. C is a businesswoman, Mr By Easy estimates. So, Mr Sea Basin Business off. Oh, from nature. Well, Mr C. Source for nature. Off under $10,000 Mr Wise There. Okay, I&#x27;m a restless, trustworthy customer to you, so I haven&#x27;t being You can&#x27;t even see what happens. So, Mr my promise to pay 10,000 voters within five months Now what do you think? All right, Mr C, How will Mr C will be benefited from this production? So this is also told us this would possess is no less. However, only accounts will be affected from this from the struggle that this was nonsense Because Mr C has made saying so in public dollars Increasing revenue if I see one second is there for whose objective, Mr by, is that Dr Mr See You got a longer to recoverable from Mr right So that it won&#x27;t be said by electrical to see no What do you think? How? Mr Seen any benefit? If if Mr C is able to recover that moment in less than five months, that only that only only Mr Stephen. Okay, Because no more. The more Mr C is able, I&#x27;m the quickly Mr C is able to recover the amount from Is this too much? The more it will be beneficial for Mr C. Okay. So that this working major in a mountainous little ratio that please write down this food if there goes collection here it is. No. Then it is then, if you should for you. Yeah. So are no number off days. Unknown number of months, a little more off. Unless a number of years will be present that the business, everything will be able to recover the heart with him. Message here. So that benefit that is this entropy. Okay, so our current solution matches with choices. They chose that, but we have a collection. The Baghdad the better it is for business and so choices. So that&#x27;s all for a solution. Thank you.

Puneet Prajapati · Answer

Okay, so let&#x27;s understand the current problem. Okay? So to begin with, we will start with the, you know, counting the basic accounting question. And then we will move to our main solution. Okay, so it&#x27;s a said minus lovely piece equals store equity. Okay, so let&#x27;s say to understand this basic accounting question. First of all, we need to understand that. What does the counting the question say&#x27;s Okay, so let&#x27;s suppose you are Oh, you are dealing in the business off selling real games. Okay. By selling the video game to the customers, you have generated revenue off housing. $1000. Okay, $1000. Bye bye. I every $1000 under the asset, I will tell you. So let&#x27;s suppose that you have sold the video games to your customers, but you are able to receive them out. Attn. This part okay, your customer is likely to pay you off. Let&#x27;s after 30 days of Peter. Okay, So whatever the amount that is receivable active at the future pointing, dying, that amount is known as a sec. Okay, So even if you have sold the video games to the customers, but still you have not been paid that amount is irrecoverable from the customer, so that will be considered as your I said. Okay, let&#x27;s suppose in processing the material of video games, do you need to purchase the material from someone else like your supplier so that you can persist the video games in tow? Saleable product. Okay, so for that you have imported someone from the outside of the country, okay? And you have important material off $500. You have important material of $500 by I have returned $500.50 head liabilities because a liability is an amount people for the for the benefits that has bean avail. Okay, Lake the or in simple terms, we can say liabilities and is an amount which is people like the future point at the future at a future point in later. Okay, Now, what is the equal devotion? $500 housing minus. I wondered because 500. What is this fight? One day? You can completely, you know, interpret this through the question that so they could be thrown business after being off all the ladies. Okay, so let&#x27;s support if you have $1000 deficits. Do you have Thompson, owners of physics. How that are They&#x27;re recoverable from the customers, but no. What happened? You have also liabilities off 502. You have to obey them. So after netting the recoverable and table amounts, you have $500 of equity backed that. It&#x27;s your personal amount that you will take up with this amount. A killer who, because that is a lian free amount you in free means nobody has the right to, you know, detached that amount from yourself. Because it is that take away from the business after being off all the liabilities. Okay, so we have understood the basic part of the question. Now, let&#x27;s move, lover. Basic salute. Those main solution. Okay, so in the portion we have been asked, that vote will be the effect on the both sides of the equation if us is hookers. Okay. That is to a very simple part. I mean, you have. Okay, he&#x27;s the potion Say&#x27;s that the sale even has been aboard. So let&#x27;s say it is a guy I see. Okay. Now, if there is a cash sale, okay, we have initial. I think we&#x27;re not supposed to write it here. Okay, let&#x27;s first, you know, just get the initial initial initial Ramones like they are in tow. You know, business offices selling. You do games to other customers. So we have initial amounts. No more confused. I&#x27;m just taking them all from this one. This one in this way. $1000 opposites. They&#x27;re recoverable. $500 off liabilities. 500 on herself, Equity. Okay, Now you have understood the basic concept of accounting. Question? No, let&#x27;s move to the solution. Okay, let&#x27;s suppose we have a cash sale of 500. Okay? No, if I will sell the video game, and against that, I will receive cash. What will happen? My sex. I will also increase because the asset also include the cash available with the business entity. Let&#x27;s suppose let&#x27;s suppose we have a company, Okay, but the s excited will also include the cash available in the business like we used to keep cash, you know, hard cash in the cash drawers. Or we can say our bollards are some some other type of stuff in which we can, you know, keep outta cash. So they will be $500 sale if if If we have you know, made a sale of $500 in cash than assert side of Greece. They will be more liability by there. So because we have because for for making this sale, we have incurred no type off liability. Okay? We have because I&#x27;m just supposing that I&#x27;m just making this is an example to make the solution here. Okay. So as we will sell the video game on cash on a cash basis So we will realize that cash around off 500 which will be included in the outside as the cash balance. Okay. No one the opposing side of the question. What will happen? See the motive for the businesses to own profit and what is actually profit? Nothing in the profit is simple. Everyone knows this. Okay, See, it&#x27;s minus expenses. So if vehicle in Greece ever since, they will be increasing profits off, if you will in Greece, other expenses, they leave degrees in Crawford&#x27;s. Okay, So, like flies, if there is increase in sales increasing states. So the secret about that will be your takeaway. After paying off all the liabilities be greater by that. So because you have made sales more than before. Okay, like you have made extra sense or you are making revenues, so your take of it will be greater. It is very, very office. Right. So you&#x27;re 500 will be. I do. Do you? In your big of it. Okay. So words the neck current. What is the net effect of the tradition? It&#x27;s this one becomes 15 under. This will be a sickness 500 and this will be $1000. Okay, so what is the net effect? What is the net effect on the both sides of the question? This this we have as the initial level. This we have after considering the transaction. So you can see there is a 15 and $500 increase. There is also $500 increase. So the correct solution we can conclude for the problem. 27 is e. Okay, so the correct choice. Okay. So you can derive the deny dissolution by forming the, you know, basic complication. Because without informing the question, you will not. You will not reach anybody. Anything. Okay. So tax are for the current solution. Thank you.

Puneet Prajapati · Answer

Okay, so let&#x27;s understand the current solution. But given keys, first of all, people right over BC counting Grishin and from the F B. We&#x27;ll start with the institution. Okay. Okay, let&#x27;s see. We are We&#x27;re very, very willing to dealing the business off. Selling, selling close to our customers. Okay, in tow. Mainly textile business. But I don&#x27;t need a level, you know. So I do not have sufficient money to start the business. So what will I do? I will go to the misters. We go to my related Sze, I will go to my friends to raise the capital, to raise defendants to France to find to find my business. But Okay, so what happens? And a citizen amount? That s it is what What are the elements? First of all, I&#x27;m talking about them. Then we&#x27;ll move to the solution under six under a sex. Those are those amounts which are recoverable from anyone else, such as customers, depositors with whom we have deposited our money or the person&#x27;s the womb. We have advanced some off our cash reserves. Okay, Those recoverable amounts will be included in our sex and most importantly, cash in bank balance cash in bank balances. Less. I am writing. Bless. There is nothing. There isn&#x27;t a thing to confuse about. Get confused about it. It is just I&#x27;m, you know, trying to locate something else before writing anything. Okay, Gash bank balance. Bless. And you ballistics. No water. Then do ballistics. Let me show you. If I have to produce some clothes to say to our customers, we will have machines, the produce roads. We have vesting testing machine so that we can know that for type off. What type of quality? Off load via policing right now. Okay, for these are the items we will be. Oh, you know, listing under the under Tito sex. In contrast to their sex, the libraries are in contrast to asserts. Okay, in contrast to recovery bailamos lively Be able amount, sir. Considered in the landlady says outside. So there is no contrast against cash and bank balance. Okay, but I can write very precisely that it is sharp and long time dead like you take, you know, known for loan to purchase the house. Okay, yard leakers to purchase any type of property like that. So these amounts which are people after a certain period of time will be included in liabilities like, it is the money that you have to pay to someone for the benefits. You have a bit of a okay. No. What is that? Don&#x27;t equity. It includes capital greased. The officer Lawson. What is the meaning of capital? Raced everything. You very, very, very shortly. Okay, So capital raise beans. What? What amount of friends you have raised toe internally or externally, from within the organization. What from outside the organization that the money will be considered in equity. What we can also see very well include our profit and loss on during the period. In a pretty component, we can also it could be is also known as you can write it down. What I&#x27;m writing here. Okay. Take away from business off being all liabilities. Okay, I&#x27;m asking to write. You write down on all of this by because this becomes easier when you revise for your exams also. Okay, so these are the gums. Okay. Now let&#x27;s move to our main solution. What is our main solution? First of all, we will draw our basic question and exams also, wherever you go in most of the accounting concept, you will face accounting question as you are complimented. Topic to help you throughout the subject. Okay. No, the portion is asking those What will be the effect off issuing stocks. Okay. Issuing capital between stocks in exchange for escorts. First of all, I will brought a dragon for you so that you will be able to understand it. Matters like to suppose we have extent company okay, Willing toe start new loading business. Okay, we&#x27;re chart off firms as off. No. So it will Porto a company. The next company says that that ex company say&#x27;s toe a complete that ex company will give shares Love X company go Any company okay? And Indra done what he has to do. They will give a sex who x company who find the business purpose. Okay, this is very very this This transaction is very, very known to you that what&#x27;s happening here in the red line, the eight companies is giving a sex to x company so that I said sometimes all you can say, you know, cash bank balance machinery to start the new business. Okay, but for text company is giving to a shares off X shares of ex company to a company. These are ownership off issuing company who silencing Go. We will understand the shares. The Tom she is detailed capital that some provincial capital and like other terms in later future. Then we will face much detail problem. But just understand for the same Sekoff this solution that X is issuing begins it 10% 10% ownership off itself off ex company do a complete on in exchange ex companies receiving ex sex from a comic who started a project, that&#x27;s all. Okay, so they will be increasing its excite by there. So because the area here, the company is giving a search to X company. Okay, so they will be in Greece. Dinosaurs? That&#x27;s $1000. Okay, so there are no liabilities? I think so. Because there is no recoverable PayPal a mouse. However, as I have started here, that vote number the capital raised whatever defendants you will raised. You will include that amount here as villains. Okay, so you&#x27;ve been in $2000 here. So you have raised the capital. Who? The extent of $1000 from a company. You have received a sex from a come from a company. So the extent off $1000. So they&#x27;re on both side in Greece. We&#x27;ll get now. Let&#x27;s form the solution. If there are both side in grease. So the correct choice. Just if you have industrial this transaction, if you have in the strictest election, then it would not have bean much difficult. Oh, I understand this calculation, which I have just experience. I am, I am taking $1,000,000 just isn&#x27;t just as an example, Jubal, you can think it like this. Also, like we have received, the, uh, received has subsided. Plus, like we have received a sensible. So we&#x27;ll make in addition to the Essex if we have so And here we have sure shares are assured the ownership off our company to someone else like a complete. So we will also sure. So the larger make in addition to the duty Also, that is right. There is both side in Greece. Okay, so the correct choice for probably 28 days. Thank you

Puneet Prajapati · Answer

I understand being meaning off on welcomes. Okay? Sort of. But that people understand There what is the actual implication or P State comes. Okay, so just the type of account. Okay? Which will have opposing effect on the previously gender. A couple dependence is okay. Although we have returned our technical definition here now, I ve vill understand this stipulation through an example. So let&#x27;s suppose there is the Mr B. Okay, who isn&#x27;t dealing off? Let&#x27;s video games. Okay, So, Mr Reyes dealing in business off Williams and Mr C is a trustworthy customer off Mr B. No. What happens, Mr. ISS Cell, So I didn&#x27;t read begins to Mr C. Okay, so after selling video games Mr A has recorded Let&#x27;s it $1000. As is revenue. Now what happens after receiving the video games for Mr A Mr Sea verifies that the video games that mark I find it really gives. OK, So what happens? Mr Cedar? Don&#x27;s back. Mr. C returns back those video games too. Mr. B, seeing that that the games that fight occurred So the actual work which which Waas which were done? No mystery boss. 500 voters. Okay, so these are there? Does Sailor does know what happened? What is what is the actual implication off contract count? Is that that then Mr is sold? We do games must to see there is never a balance off $1000. It means it visited the comfortable from Mr C. Okay, the governable from Mr C. But whatever, Mr. C return games worth off $500 to Mr A. Okay, so that the next recoverable about from Mr C as a customer now will be $500 only. Okay, so it is a sailor dunce. Okay, this is a sailor turns off $500. Now these account so sales this town will be off contra. They&#x27;ve a new accounts. Like, if it really was down on the Children renewed. That has been previously gender. Okay, so now that matches with our current solution matches with joy, See that this is this found. Okay, so that&#x27;s so you can write down what I everything so far, along with the example for everything. Okay. However, Jean saw Joy sees the correct answer. That&#x27;s all for the solution.

Puneet Prajapati · Answer

Okay, so let&#x27;s understand the current problem. How to drive the solution. Okay, First of all, we will draw our basic accounting question which will help us in diving. The solution, okay, is it&#x27;s minus liabilities. He was still equity. Okay, so this is the basic accounting question we have in front of us. But what does this accounting question says? Let&#x27;s understand. Suppose you are in business of a restaurant making making very, very grateful delicious to the to your customers. Okay, so you have, you know, sorted. And you have also on land delivery segment to your customers. But sometimes what happened? Your customers say that I really, really I will pay you after some week or a month. Let&#x27;s suppose in that case also, however it is not. It is not possible in real boy. But let&#x27;s suppose for our example. Okay, so suppose your five customers have said that they will pay you are they will pay you off after a month. And that is the amount totaling off $10,000. Okay, $10,000. So before you sold before you sold off the foods and beverages to your customer, you will also have to buy the raw material. You know, raw material to process the actual food into the into the actual, you know, act a bill. Edible food. So you have purchase some some off the material from the suppliers. All 5000 but the among has not been paid yet. Please remember my words. The asset is the amount which you are likely to receive from your customers along it. That if you have, let&#x27;s say if you have initial cash balance off 5000 voters, that will also be considered as assets that you are actually owning. Okay, so the total assets will be $15,000. However, there there is only 5000 off level, please. Okay. The library Is that the amount which are still people? Let&#x27;s suppose you have incurred the telephone expenses for generally month off $1000. Okay, But you have come to know factory, but still and you have also Oh, you always have to pay for every expert telephone expenses. But the generally telephone expenses will be considered as your liberties nor of the celebrity by that. So because the because the time or the due date the due date for making Jen very telephone expense payment has bean passed off. So that is why the amount that which is due, which is due to be paid will be considered us liability. Okay, so what is the portion of equity? Actually, with $10,000 what is they? Could be. It is nothing, Berta. Take of it from the business in in in very, very symbolic downs. However, and Dale, we will understand this. Also that were the actually worked out, actually, components of the inquiry. But as of now, in very, very simple terms to make the question more interpret Table the cookie is a take of it from the business after being off all the ladies. Okay, Now let&#x27;s come to our question. We have understood what is the meaning off a sex. What is the meaning of liabilities? And what is the meaning off equity? Okay, Now let&#x27;s come to live with me in question, which is our, well, most concerned. Okay, so let&#x27;s most of all right, d question. So the question is asking from us that if let&#x27;s say we are likely to receive $10,000 which we have just stated. Okay, which we are. We have just stated that what type off the that we&#x27;re likely to receive $10,000 okay from other customers, which is that remote. And suppose we have libraries off $5000. So already cooties $5000. This is the peak of it. But the portion is saying like the supposed we have received 5000 from the customer who has received our four billion resurfaces. Okay, which the customer has paid $5000 to us who have received the benefit overs benefit of goods and services. So if let&#x27;s say I have to this it&#x27;s a tour. In total, I was having $15,000 bye. $15,000 at the initial level. I have. So I would like to hear $15,000. Okay, but know what happened? I have received $5000 from our customer. So what will happen? So this is the total amount we have right now in comes off amount feature which were likely to receive, plus the 5000 of the $5000 off the cash. We do have an hour cash drawer. So vehicle Dylan, the $5000 by there. So because we have received from our customers So 5000 is the amount which we have received from this from this 10,000. This one. Okay, this is the 5000 we have received. Now, if we are going to deduct the balance off the amount with which we&#x27;re likely to receive so they will be an occasion off the $5000 also. Why? That&#x27;s so Because we are receiving the cash from the customers. It is just electing effect. It will not effect any any off the element of the question right now. But let&#x27;s focus is I know it will be clear toe. Rick, you&#x27;re to most of you. But let&#x27;s understand it. In most elevated terms, let&#x27;s suppose if I have a set, okay, in next she that I will be going this minute because it would be, you know, convince him in that cheap. So I have a sex off 10,000. Okay, I have a sense of 10,000 I&#x27;m likely to receive. Okay. I&#x27;m like, you&#x27;re like you do receive $10,000. Some customer has paid, paired me off $5000 but this this amount will be reduced if the parents off the amount which were like to receive which were like to see will be reduced then against that, because there are double effect off the every financial transaction. The rules is the rules is the rule of accounting. Question. Please write it down so that you can we get a clear idea. What? I&#x27;m actually seeing the full effect off every financial conviction. Okay, so what is the double effect? First of all, David decrees in my balance of debtors that there&#x27;s that amount which from Azad the persons from which were likely to the city payment. Okay, so they will be degrees in a sex or they will be in the green in balance. Okay. And again, they would be double effect. So first affected, this seven effectively, they will receive the cash from our doctors. So that is clear. Okay, now let&#x27;s come to the basic counting, wishing so there will be no change. Buy that So because minus 5000 plus 5000 it will be both squared off. Okay? Minus plus equal to zero. 15,000. $15,000 of a six $5000 off liabilities will again come. Go $10,000. So initially it waas 15,000 minus five equals to $10,000. Let&#x27;s make it $10,000. Don&#x27;t confuse that via my going right. $10,000 in studio initial $5000 normal. That&#x27;s the case that $10,000 We have initially sex like cash, bus conductors and minus lively days. So it will be 10,000 lives. Okay, so there will be no change in the either side of the equations. There will be no change before doctors before the drug addiction situation. And that is after the damage institution. Okay, so the correct choice for problems in physics is D. Which says what? What does what does the choice de ces that neither of the site changes? Okay, decide remains constant. And this same remains constant after the transaction be ever recognized. Okay, so the correct choices problem 26 is the That&#x27;s all for the solution. Thank you.

Problem 14 Easy Difficulty

Which of the following indicates a positive trend for inventory management?
A. increasing number of days’ sales in inventory ratio
B. increasing inventory turnover ratio
C. increasing cost of goods sold
D. increasing sales revenue

Answer

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Principles of Accounting Volume 1: Financial Accounting

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Principles of Accounting Volume 1: Financial Accounting

Mitchell Franklin, Patty Graybeal, Dixon CooperPrinciples of Accounting Volume 1: Financial Accounting

Mitchell Franklin, Patty Graybeal, Dixon Cooper

Principles of Accounting Volume 1: Financial Accounting