Question：Which two of the following are valid reasons why the inventory turnover period of a company increases from one year to the next?
A. Slow down in trading.
B. Obsolete goods
C. Seasonal fluctuations in orders.
D. A marketing decision to reduce selling prices.
The correct answers are:Obsolete goods and slow down in trading
A slow down in trade increases the inventory turnover period. Assuming that inventory is still being ordered at the same rate this can lead to a build up in inventory.
Inventory increases may occur where there is no longer a demand for the product due, for example, to technical obsolescence.
Seasonal fluctuations in orders will affect the amount of inventory held at any one time but they will not affect inventory turnover period year on year.
A decision to reduce sales price would not directly affect either purchase price or level of inventory. If anything, it would be likely to reduce inventory holding period as the company moves to a low margin, fast turnover approach.
高顿网校温馨提醒
各位考生，2016年ACCA备考已经开始，为了方便各位学员能更加系统地掌握考试大纲的重点知识，帮助大家充分备考，体验实战，高顿网校开通了全免费的
ACCA题库（包括精题真题和全真模考系统），题库里附有详细的答案解析，学员可以通过多种题型加强练习。
戳这里进入ACCA免费题库>>>
微信扫一扫，关注ACCA*7资讯，满满的干货喂饱你！ACCA微信公众号：gaodunacca
ACCA分享与交流QQ群：227573128
写评论
