15/2 Stock and Financial Control MCQ with Answers

What is the term for the entire stock of a business, including materials, components, work in progress, and finished products?

• Assets

• Inventory

• Equipment

• Liabilities

Why does holding excess stock cost a company money?

• It increases manufacturing speed

• It generates storage costs without generating revenue

• It reduces the risk of product defects

• It improves customer satisfaction

What does 'stock turnover' refer to?

• The number of employees working in stock management

• The rate at which stock is used and replaced

• The amount of stock a company has at any time

• The process of selling old stock at a discount

Which type of company is likely to have the highest stock turnover?

• A specialised engineering firm making bespoke equipment

• A company producing fast-moving consumer goods (FMCGs)

• A warehouse storing historical artefacts

• A furniture restoration business

Which of the following is a reason why stock might be written down?

• To account for a reduction in the value of stock

• To increase the balance sheet value of stock

• To improve warehouse efficiency

• To order new stock at a reduced price

Which of the following is NOT a reason why stock might be written down?

• A change in regulations making stock obsolete

• An increase in customer demand

• Products reaching the end of their lifespan

• Technological advancements making stock outdated

What is a ‘minimum stock level’?

• The maximum amount of stock a company should hold

• The threshold below which stock should not fall

• The amount of stock that must be sold each month

• The most expensive stock in a warehouse

Why do companies set minimum stock levels?

• To ensure they always have enough stock to meet demand

• To prevent theft from warehouses

• To reduce employee workloads

• To avoid high product prices

Which of the following is a direct cost associated with storing stock?

• Salaries of production workers

• Rent for warehouse space

• Marketing expenses

• Customer service costs

Which factor is NOT considered when calculating the minimum stock level?

• The average rate of stock consumption

• The production requirements

• The company's annual profit margin

• The reorder level