147. Inventory turnover
In the spaces provided, indicate the likely effect of each of the following events or strategies upon the inventory turnover rate. Use the following code letters: I for Increase, D for Decrease, and NE for No Effect.
____ (a) Switched from the LIFO flow assumption to FIFO during a period of rising prices.
____ (b) Dramatically increased advertising expense.
____ (c) Increased the sales price of merchandise that is so popular it is difficult to keep in stock.
____ (d) Implemented internal control procedures to reduce a serious inventory shrinkage problem.
____ (e) Switched from a restrictive credit policy to offering liberal terms to credit customers.

148. Inventory flow assumptions
Briefly discuss the factors management should consider in deciding:
(a) Whether to use specific identification or a flow assumption in measuring the cost of goods sold.
(b) Whether to use FIFO or LIFO. (Assume a long-run trend of slowly rising prices.)