Posted by: Pdfprep
Post Date: February 13, 2021
In the current year, a merchandising organization had an inventory turnover ratio of 3.0, which was less than the industry average of 6.5.
Which of the following offers the most likely explanation for this difference?
A . The organization has understated the amount of inventory in its financial statements
B . The organization has overstated the cost of purchases in its financial statements.
C . The organization is holding obsolete or damaged items in its inventory
D . The organization experienced an unexpectedly large increase in sales shortly before year end.
Answer: C