Question

Which of the following ratios would not generally be used to look for inventory and cost of goods sold related frauds?

A. Accounts payable turnover
B. Gross profit margin
C. Inventory turnover
D. Number of days' sales in inventory

Answer 1

The correct answer is A. Accounts payable turnover.

Step-by-step explanation:

Accounts payable directly refer to the obligations contracted by the company in the past, which is not directly related to the inventory in the referenced terms. On the other hand, the other three ratios do analyze the behavior of the acquired goods and their management within the organization.