CIPS L4m4 Ethical And Responsible Sourcing · Free Practice Question Easy
Question 12
Which of the following should be considered when calculating ratios relating to a supplier's liquidity?
- A inventory
- B reserves
- C receivables
- D profit
Reveal correct answer
Correct answer: A
Explanation
the correct answer is inventory. This is based on a real exam question that confused me. In the beginning I didn't understand what the difference was between inventory and reserves.
For CIPS, reserves don't relate to reserves of stock (which is what I initially thought) but rather it is an accounting term referring to a credit balance (i.e. money in the bank). If you got the answer straight away- well done- you're better than me!
p.44
Discussion
Think the marked answer is wrong, or have a better explanation? Share it below — comments appear after review.
You must be logged in to post a comment.
