NAIMMCQ Economics A company has an inventory turnover ratio of 1.5. If the company pays 5% more each year to acquire inventory, what will be the impact on this ratio over time resulting from a shift from LIFO to FIFO inventory accounting?

A company has an inventory turnover ratio of 1.5. If the company pays 5% more each year to acquire inventory, what will be the impact on this ratio over time resulting from a shift from LIFO to FIFO inventory accounting?

Economics

A company has an inventory turnover ratio of 1.5. If the company pays 5% more each year to acquire inventory, what will be the impact on this ratio over time resulting from a shift from LIFO to FIFO inventory accounting?

A) The turnover ratio will increase
B) The turnover ratio will stay the same
C) The turnover ratio will decrease
D) The company's method of calculating turnover ratio will change

Answer: C

NAIMMCQ

A company has an inventory turnover ratio of 1.5. If the company pays 5% more each year to acquire inventory, what will be the impact on this ratio over time resulting from a shift from LIFO to FIFO inventory accounting?

A company has an inventory turnover ratio of 1.5. If the company pays 5% more each year to acquire inventory, what will be the impact on this ratio over time resulting from a shift from LIFO to FIFO inventory accounting?

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