Assume that Pickies R US uses a perpetual LIFO inventory system. During the period, it sold 14 units on credit to one customer.

Review the statements below and select the ones that are correct regarding the days' sales in
Inventory ratio. (Check all that apply.)

The ratio estimates how many days it will take to convert inventory into accounts

receivable or cash.

The ratio reveals how much Inventory is available In terms of the number of days' sales.

The ratio measures what percentage of profit the company is making for every dollar of

Inventory it sells.

The ratio measures the adequacy of inventory to meet sales demand.

The ratio is often viewed as a measure of the buffer against out-Of-stock inventory.

The ratio is useful in evaluating liquidity of inventory

Assume that Pickies R US uses a perpetual LIFO inventory system. During the period, it sold 14 units

on credit to one customer. Demonstrate the journal entry required to record the sale and the cost of

the sale by setectin11 all of the correct items below. (Check all that apply.)

Jan 1 Beginning Inventor 10@$12

Mav5 Purchase 10@$15

Aug Sale 14 units $40each 

Merchandise Inventory is credited for $198.

Cost of Goods Sold is debited for $198.

Sales is credited for $560.

Cost of Goods Sold Is credited for $198.

Accounts Receivable is debited for $560.

Sales is debited for $560.

Merchandise inventory}' is debited for $198.

Cost of Goods Sold is debited for $560.

Merchandise Inventory is credited for $560.