[may8899]

I am a newer, and need your help:

In Willey Auditing Review book 2012 Module 2, both “Task-Based Simulations 7 – question 3” and “Task-Based Simulations 8 – question 1” about “explanations for an increase in the inventory turnover”.

In page 147, answer for “Task-Based Simulations 7 – question 3” is “a large percentage of sales occurred during the last month”. I understand it.

In page 148, answers for “Task-Based Simulations 8 – question 1”are A, B, D. I also understand. But in its explanation of E (a large percentage of sales occurred during the last month) saying “such changes in sales will not affect the inventory turnover ratio.”

I am really confused. Could you please help me to understand it?

thanks

[Anonymous]

Inventory turnover – avg cogs / avg inventory … If cogs is not given then we use avg sales ….

So change in sales technically won't effect the inv turnover ratio..

[may8899]

thanks.

You are great person! I am moved by your courage!

I don't even have courage to try!

Have a nice weekend

[Author]

Replies