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1. MM Co sells some inventory on credit for a profit.
All else being equal, what will happen to the quick and current ratio after this sale?
My answer: I put as quick ratio and current ratio increases, not sure what went wrong as I got 2/4 marks. I assume that 1 of my answer is wrong.
2. A company has the following financial informations:
$m
Sales 81
Purchases of raw material 13
Closing Inventory – Raw material 2
Closing Inventory – WIP 9
Closing Inventory – Finish Goods 12
Trade Receivable 22
Trade Payable 7
Cost of Sales 54WIP are 75 completed. Cash sales amount to 11% of sales. Assume 365 days.
Calculate the operating cycle. TO NEAREST DAYS
How do you work out in the WIP as i always got it confused. Do I use the 75% multiply with its WIP value of $9m (eg: [75% X $9m] / $54m ) or should I multiply it with the COS of $54m (eg: $9m / [75% X $54m] )?
Overall, how shall I attempt this?
Can you make your questions clearer if you want our help please
Don’t put two or three questions together
Where are these questions from?
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Apologies for the confusion. These MCQ questions were potentially taken from the ACCA Hub by our lecturer for class revision, but the answers weren’t provided to us. That’s why it’s a bit unclear where we went wrong in some of them.
I will retry again.
Apologies again for the double question. I’ll make sure to learn from this mistake and not repeat it again and will post a question by question.
You must not use this as an answering mechanism for lots of questions you have clearly not watched our relevant lectures, paid attention to your tutor. My advice is do not it try and learn by looking at past questions.
Get a good understanding of the paper first.
Our role is not to give private tuition and therefore you must watch the free lectures. If you expect answers from us, then you should clearly state the question individually and say why you are struggling with it.
Stating that your tutor had set you them to do but hadn’t give you the answers makes me think you think you misunderstood what we are about.
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