Which of the Following Is an Accurate Statement Regarding Inventory

question 6

Multiple Choice

Which of the following is an accurate statement regarding inventory and risk?

• A) Inventory with a high business risk includes products with potential obsolescence.
• B) Auditors often have a greater concern for misstatements when inventory is stored in one warehouse.
• C) Inherent risk is generally set at low for manufacturing companies.
• D) Performance materiality for inventory is determined before assessing client business risk.

Interpret the accounts receivable turnover and its implications on business operations.

Analyze sales, cost of goods sold, and their impact on various financial metrics.

Understand and calculate the inventory turnover ratio.

Evaluate the average collection period for accounts receivable.