Inventories Video Lecture | Principles and Practice of Accounting - CA Foundation

68 videos|160 docs|83 tests

Top Courses for CA Foundation

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.
68 videos|160 docs|83 tests
Explore Courses for CA Foundation exam
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
10M+ students study on EduRev
Related Searches

study material

,

Viva Questions

,

Inventories Video Lecture | Principles and Practice of Accounting - CA Foundation

,

pdf

,

ppt

,

practice quizzes

,

shortcuts and tricks

,

Summary

,

mock tests for examination

,

past year papers

,

video lectures

,

Important questions

,

MCQs

,

Previous Year Questions with Solutions

,

Sample Paper

,

Inventories Video Lecture | Principles and Practice of Accounting - CA Foundation

,

Exam

,

Semester Notes

,

Free

,

Objective type Questions

,

Inventories Video Lecture | Principles and Practice of Accounting - CA Foundation

,

Extra Questions

;