Post Utme Madonna University 2024 Commerce Question 16

Practice objective / multiple choice question 16 from the 2024 Post Utme Madonna University Commerce examination.

Post Utme Madonna University 2024 Commerce Objective / Multiple Choice
Question 16 POST_UTME_MADONNA_UNIVERSITY • 2024 • COMMERCE • objective

A company's inventory management system uses a first-in, first-out (FIFO) method to track stock levels. If the system is not properly maintained, what is the likely consequence on the company's financial statements?

Answer Options

A. The company's net income will decrease due to the loss of inventory.
Correct Answer B. The company's cost of goods sold will increase due to the incorrect valuation of inventory.
C. The company's accounts payable will decrease due to the reduction in inventory levels.
D. The company's accounts receivable will increase due to the delay in receiving payments from customers.
Correct Answer
B
Correct Option:
The company's cost of goods sold will increase due to the incorrect valuation of inventory.

About This Question

This is Post Utme Madonna University 2024 Commerce Question 16. It is one of the objective questions from the 2024 Post Utme Madonna University Commerce examination.

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