Question regarding Inventory Turnover

  • Creator
    Topic
  • October 20, 2015 at 2:03 am #197653
    wjs0601
    Member

    Hi guys,

    I have an Audit exam on Nov 12th and I am just pounding away questions on Becker right now hoping this will be my last forever.

    I ran into this question on Becker and I need your help!

    Q. Inventory turnover decreased substantially from the prior year. which of the following is a possible explanation for this finding?

    A. Item shipped in FOB shipping poing during December, year 2 were included in year 3.

    So my own explanation would be that since sale was included in year 3, that would increase COGS for year 3 and decrease average inventory for year 3 which increases inventory TO for year 3 hence the statement is wrong… Can someone correct me on this please??

    Thanks

    FAR - 83
    REG - 86
    BEC - 81
    AUD - 81

    GAME OVER

  • The topic ‘Question regarding Inventory Turnover’ is closed to new replies.