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- This topic has 3 replies, 3 voices, and was last updated 7 years ago by John Moffat.
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- June 22, 2016 at 5:31 am #323769
When asked to caculate the cash operating cycle. For the WIP holding period the answer i got was 47 days. But when i check the answer key it shows 48 days , my working were exactly the same as the answer key . The answer is different probably because of the rounding off.
I want to know if we will be penalised if we dont get the exact 48 days. Or the marking scheme will allow a certain range of answers to be accepted ?
June 22, 2016 at 7:50 am #323783If it is in Sections A or B of the exam (the MCQ’s) then only one answer is correct.
If it is in Section C (the long-form questions) then the marks are for the workings and rounding does not lose marks.
June 25, 2016 at 5:46 pm #324080Sir, in chapter 3 the formula for Inventory turnover, receivables turnover and payables turnover is given and the example mentions inventory days, receivables days and payable days.
After watching the lecture, the inventory turnover formula is inverted compared to inventory days formula (same for other formulas). Could you help me understand this?
I also noticed that the formula for inventory days, receivables days and payable days have been removed in the current notes.
Thanks
June 25, 2016 at 6:35 pm #324087Inventory turnover calculates how many time the current inventory level is sold during the year. Inventory days measures how many day the inventory will last for.
I am sorry the formulae disappeared from the notes – it should not have happened and will be corrected.
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