IIA-ACCA Exam Dumps | In the current year, a merchandising organization had an inventory turnover ratio of 3.0, which was less

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Question 164/212

In the current year, a merchandising organization had an inventory turnover ratio of 3.0, which was less than the industry average of 6.5. Which of the following offers the most likely explanation for this difference?

A. The organization is holding obsolete or damaged items in its inventory

B. The organization has understated the amount of inventory in its financial statements

C. The organization experienced an unexpectedly large increase in sales shortly before year end.

D. The organization has overstated the cost of purchases in its financial statements.

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Question 164/212

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