Inventory turnover ratio is most affected by:
AChoice of FIFO vs LIFO
BCurrency of foreign exchange
CIncome tax slab applied
DNumber of bank branches
Answer & Solution
Correct answer: A. Choice of FIFO vs LIFO
1. FIFO uses older costs for COGS in rising prices; LIFO uses newer costs.
2. This changes both COGS and closing inventory value, affecting the ratio.
3. The other listed factors don't directly bear on the ratio.
_Source: ICAI BoS Foundation Paper 1, Ch 4 "Inventories", §2 (iii)_
Related questions
Periodic inventory taking requires:Inventory of slow-moving items is generally:If GST paid on raw materials is recoverable as input credit, the inventory cost is:Borrowing costs may be included in inventory cost when:Adjusted selling price method is typically used in:Under weighted average method, value per unit at issue is computed as:Cost of conversion includes:If opening inventory is understated, current year's net income is: