Question

35. INVENTORY IS NOT NECESSARILY A BENEFICIAL ASSET IN A STRATEGIC SENSE. 36. THE XYZ COMPANY MANUFACTURES AND SELLS SWEATERS. THE CFO DECIDED TO SELL THE COMPANY'S GULFSTREAM JET. THE BOOK VALUE OF THE JET WAS $1 MILLION; THE JET WAS SOLD FOR $3 MILLION. THE PROFIT SHOULD BE ATTRIBUTED TO OPERATING INCOME. 37. ONE TYPICAL WAY OF LEVERAGING ASSETS IS TO BORROW FOR A REVOLVING CREDIT LINE ON THE DISCOUNTED VALUE OF THE ACCOUNTS RECEIVABLES. 38. THE LIFO AND FIFO APPROACHES TO PRICING ACCOUNTS PAYABLE CAN IMPACT THE REPORTABLE INCOME OF A COMPANY. 39. GENERALLY, ACCOUNTS RECEIVABLE AGING SCHEDULES ARE USED TO ANALYZE THE CREDIT QUALITY OF CUSTOMERS AND REVENUE RISK TO THE FIRM. 40. INTEREST RATE AND INFLATION RATE FLUCTUATIONS ARE AN EXAMPLE OF TECHNOLOGICAL RISK.

is the statement true or false

Answer 1

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35) False.

A company considers inventory as it's the largest current asset of its business. To generate financial statements, companies offer monetary values of their inventories. This process is called inventory valuation. Measuring inventory is important as it helps a business to take major business decisions for the long term and other strategic decisions.

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