Multiple Choice. 2 points each. Select the answer that BEST answers each question The inventory turnover ratio: a. is used to analyze profitability b. is used to measure solvency. c. measures how quickly a company turns over its merchandise inventory d. validates the acid-test ratio. e. calculation depends on the company's inventory valuation method. 1. A company has cost of goods sold of $85,000 and ending inventory of $1 8,000. sales in inventory equals: Its days 2. a. 49.32 days. b. 0.21 days. c. 4.72 days. d. 77.29 days. e. 1,723.61 days. An internal control system consists of the policies and procedures managers use to: 3. a. protect assets. b. ensure reliable accounting. c. promote efficient operations. d. urge adherence to company policies. e. All of the above. During a period of steadily rising costs, the inventory valuation method that yields the lowest reported net income is: specific identification method. b. average cost method. weighted-average method. d. FIFO method. e. LIFO method. 4. a. c. A company's internal control system a. eliminates the risk of loss. b. monitors and controls business activities. c. eliminates human error. d. eliminates the need for audits. 5. e. All of the above