CA Foundation Exam > CA Foundation Videos > Principles and Practice of Accounting > Inventories
Inventories Video Lecture | Principles and Practice of Accounting - CA Foundation
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68 videos|160 docs|83 tests
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FAQs on Inventories Video Lecture - Principles and Practice of Accounting - CA Foundation
| 1. What is inventory? |  |
Ans. Inventory refers to the goods or materials that a company holds for production, sales, or the provision of services. It includes raw materials, work-in-progress, and finished goods.
| 2. Why is inventory management important for businesses? | |
Ans. Inventory management is crucial for businesses as it helps in ensuring smooth operations, minimizing stockouts, optimizing cash flow, and avoiding excess inventory. It also helps in meeting customer demand, reducing carrying costs, and improving profitability.
| 3. What are the different methods of inventory valuation? | |
Ans. There are several methods of inventory valuation, including First-in, First-out (FIFO), Last-in, First-out (LIFO), Weighted Average Cost, and Specific Identification. These methods determine the value of inventory and impact the cost of goods sold and profitability.
| 4. How does inventory turnover ratio help in assessing inventory management? | |
Ans. The inventory turnover ratio measures how quickly a company sells its inventory over a specific period. It is calculated by dividing the cost of goods sold by the average inventory. A higher turnover ratio indicates efficient inventory management, while a low ratio may indicate slow sales or excess inventory.
| 5. What are the risks associated with poor inventory management? | |
Ans. Poor inventory management can lead to several risks, including stockouts, lost sales, increased carrying costs, obsolescence, and wastage. It can also impact customer satisfaction, cash flow, and profitability. Proper inventory management is essential to mitigate these risks and optimize business operations.
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Nov 25, 2024 Last updated |
Video Description: Inventories for CA Foundation 2024 is part of Principles and Practice of Accounting preparation.
The notes and questions for Inventories have been prepared according to the CA Foundation exam syllabus.
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Video Lecture & Questions for Inventories Video Lecture | Principles and Practice of Accounting - CA Foundation - CA Foundation full syllabus preparation | Free video for CA Foundation exam to prepare for Principles and Practice of Accounting.
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