O-LevelAccountingAnalysis and interpretation7707/13 · Oct/Nov 2020 · Q291 Mark

A company provided the following information about its rate of inventory turnover. year 1 24 times year 2 25 times year 3 27 times What would explain the changes in the ratio?

Acost of sales is decreasing

Binventory is increasing

Csales volume is increasing

Dselling price is increasing

✓ Correct answer

C: sales volume is increasing

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Topic: Analysis and interpretation, O-Level Accounting (syllabus 7707). Multiple choice, 1 mark.
Source: O-Level Accounting, Oct/Nov 2020 Paper 1 Variant 3, question 29.

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