Inventory Turnover In the Spaces Provided, Indicate the Likely Effect of Each

question 151

Essay

Inventory turnover
In the spaces provided, indicate the likely effect of each of the following events or strategies upon the inventory turnover rate in the coming period. Use the following code letters: I for Increase, D for Decrease, NE for No Effect and U for Uncertain.
(a) Reduced sales prices in order to increase sales volume._______
(b) Ordered substantially larger amounts of goods in order to receive a volume discount from the supplier._______
(c) Switched from the weighted average cost flow assumptions to LIFO during a period of rising prices. _______
(d) Placed salesclerks on commission, rather than a fixed monthly salary. _______
(e) Decided to offer customers a wider selection of goods available for immediate delivery. _______

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Definitions:

Required Reserve Ratio

A regulation that sets the minimum reserves each bank must hold to customer deposits and notes, effectively the same concept as the reserve-requirement ratio but stated differently.

Commercial Banks

Financial institutions that provide services such as accepting deposits, providing business loans, and offering basic investment products.

Government Securities

Financial instruments issued by the government to finance its expenditures, including bonds, notes, and bills, that pay interest to investors.

Dollar Amount

The value of an item or transaction expressed in U.S. dollars, a common measure for comparing financial value.