Ans of Q 2 and explanation please
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I think the answer should be C as it it recognizing sales as and when orders are recd. leading to increased turnover. and speaking about Net profit as it is following LIFO , In LIFO the year end inventory is less as in the case of FIFO
In the Inventory Turnover ratio formula we have COGS or turnover in the numerator and Inventory in the denominator , so I think C justifies it.
By the way what is the answer, could you share it. Thanks!
Can you explain why net income will not be overstated? As we increase sale the NI should also increase no?
C is the ans given in book
Sorry the ans is A