Question

Which of the following statements about inventory turnover analysis is not correct?

A) In making comparisons of financial statements, it is desirable to compare data calculated using the same inventory costing methods.

B) The inventory turnover ratio and days to sell measure will be affected by the cost flow assumptions used, which causes problems for financial statements users.

C) Inventory turnover also can vary significantly between companies within the same industry.

D) The inventory turnover and days to sell ratios are consistent among companies in different industries.

Answer

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