You have been hired recently as an accountant by Apex, a small chain of stores that sells
Question:
Sarah Hussey, owner of Apex, uses modern decision-making techniques in running Apex. Two ratios she particularly favours are the gross margin percentage and inventory turnover ratio.
Required
1. What is a possible effect of the accounting system described on the pricing of products and thus operations of Apex stores?
2. What is the effect of the accounting system instituted by your predecessor on the two ratios Ms. Hussey favours?
Inventory Turnover Ratio
Inventory Turnover RatioThe inventory turnover ratio is a ratio of cost of goods sold to its average inventory. It is measured in times with respect to the cost of goods sold in a year normally. Inventory Turnover Ratio FormulaWhere,...
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Related Book For
Horngrens Accounting
ISBN: 978-0133855371
10th Canadian edition Volume 1
Authors: Tracie L. Miller Nobles, Brenda L. Mattison, Ella Mae Matsumura, Carol A. Meissner, Jo Ann L. Johnston, Peter R. Norwood
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