First 50 of 200 questions. Each one lists the choices, the correct answer, and an explanation. The checker at the top of this page saves progress in this browser when it is available.
Continue in the practice tool above to load more questions, 50 at a time.
Question 1Introduction to Retail and Store Operations
In a retail store, the person who greets customers, helps them locate products and answers basic queries on the shop floor is best described by which role?
- Cash auditor
- Visual merchandiser
- Warehouse supervisor
- Sales assistant Correct answer.
Explanation
A sales assistant works directly with shoppers on the shop floor, guiding them to products and responding to routine questions. This front-line customer contact is the defining duty of the role. Other roles focus on accounts, stock movement or display design rather than direct selling.
Question 2Introduction to Retail and Store Operations
Which activity is part of the 'back of house' operations of a retail store?
- Receiving and checking incoming stock Correct answer.
- Guiding a customer to the trial room
- Explaining an exchange policy
- Suggesting a matching accessory
Explanation
Back-of-house operations cover activities customers do not usually see, such as receiving deliveries, verifying quantities and storing goods. Helping with trial rooms, policies and add-on suggestions are all front-of-house service tasks. Separating these areas helps stores keep the selling floor clean and organised.
Question 3Introduction to Retail and Store Operations
A store holds 40 units of a product at the start of the day, receives 25 units during the day and ends with 30 units. How many units were sold that day?
- 15
- 45
- 25
- 35 Correct answer.
Explanation
Units sold equal opening stock plus receipts minus closing stock: 40 + 25 - 30 = 35. This basic stock equation is used daily to reconcile physical stock with sales records. It helps detect shortages or billing errors early.
Question 4Introduction to Retail and Store Operations
What does the term 'SKU' stand for in retail store operations?
- Shelf Keeping Usage
- Sales Key Update
- Store Kiosk Utility
- Stock Keeping Unit Correct answer.
Explanation
SKU means Stock Keeping Unit, a unique code used to identify and track each distinct item, including its size or colour variant. It allows accurate stock counting, billing and replenishment. Without SKUs, stores could not separate variants of similar products.
Question 5Introduction to Retail and Store Operations
A customer buys a shirt priced at ₹800 and the store applies a 15% discount. What is the final amount payable?
- ₹680 Correct answer.
- ₹650
- ₹720
- ₹740
Explanation
A 15% discount on ₹800 equals ₹120, so the payable amount is 800 - 120 = ₹680. Percentage discounts are calculated on the marked price before any additional charges. Quick mental calculation helps assistants confirm bills at the counter.
Question 6Introduction to Retail and Store Operations
Why is a barcode scan preferred over manually writing item details on a bill at the point of sale?
- It reduces billing errors and speeds up the transaction Correct answer.
- It allows customers to skip payment
- It increases the marked price of the item
- It removes the need for any stock records
Explanation
A barcode links each item to its stored price and description, so scanning avoids typing mistakes and shortens checkout time. Accurate billing also keeps stock records reliable. Manual entry is slower and more prone to human error.
Question 7Introduction to Retail and Store Operations
Which document is issued by the supplier along with goods delivered to a store, listing the items and quantities sent?
- Customer invoice
- Delivery challan Correct answer.
- Stock transfer memo
- Purchase return note
Explanation
A delivery challan accompanies the goods and states what the supplier has sent, allowing the store to verify the delivery. It is checked against the purchase order before stock is accepted. Customer invoices and return notes are created at different stages of the transaction.
Question 8Introduction to Retail and Store Operations
During a stock count, an assistant finds 48 units on the shelf while the system shows 52 units. What is the most appropriate first action?
- Order 4 replacement units from the supplier
- Immediately adjust the system to 48 units
- Recount the stock and check recent dispatches and sales records Correct answer.
- Report the discrepancy as theft
Explanation
A discrepancy may come from a counting error, an unrecorded sale or a stock transfer, so verifying before adjusting is essential. A recount and a check of recent movements usually explain the gap. Adjusting or escalating without investigation can hide the real cause.
Question 9Introduction to Retail and Store Operations
Which practice best supports the FIFO (First In, First Out) principle for perishable goods in a store?
- Discounting all products at the end of each day
- Keeping all new deliveries in the display area
- Storing all perishables in the back room until sold
- Placing older stock in front and newer stock behind on the shelf Correct answer.
Explanation
FIFO requires older stock to be sold before newer stock, so older units are placed where they will be picked first. This reduces expiry and wastage. Keeping new deliveries at the front would push older stock to the back and increase spoilage.
Question 10Introduction to Retail and Store Operations
A customer returns a garment with a valid bill within the permitted return period. What should the store assistant check first?
- The customer's annual purchase value
- The supplier's delivery schedule
- The current stock level of the product
- The bill, return period and condition of the item Correct answer.
Explanation
Returns are processed only when the bill, the allowed return window and the item's condition meet store policy. These checks protect both the customer and the store. Other factors such as stock levels are irrelevant to the eligibility decision.
Question 11Introduction to Retail and Store Operations
Which layout arrangement is most likely to encourage customers to walk through more of the store?
- A layout with all products grouped near the entrance
- A grid layout with the entrance at one end and billing at the far end Correct answer.
- A single aisle that leads directly to the exit
- A closed counter where goods are handed to customers
Explanation
Placing billing at the opposite end from the entrance encourages shoppers to pass through more merchandise before leaving. This increases exposure and impulse buying. Short direct routes or clustering goods near the door reduce browsing.
Question 12Introduction to Retail and Store Operations
Why are high-margin impulse items such as chocolates and batteries commonly placed near the billing counter?
- Such items require the coldest storage conditions
- The billing counter has the largest storage space
- Customers waiting to pay are more likely to make unplanned purchases Correct answer.
- These items are too heavy to be kept elsewhere
Explanation
The billing queue is a high-traffic zone where customers have time to notice small, low-value items, leading to unplanned purchases. This placement maximises impulse sales and margin. Weight, storage space and temperature are not the reasons for this positioning.
Question 13Introduction to Retail and Store Operations
A store operates with a gross margin of 30% on sales of ₹5,00,000. What is the gross profit?
- ₹3,50,000
- ₹1,50,000 Correct answer.
- ₹1,00,000
- ₹2,50,000
Explanation
Gross profit equals sales multiplied by the gross margin: 5,00,000 × 0.30 = ₹1,50,000. This figure is the difference between sales and the cost of goods sold. Confusing margin with mark-up or with cost of goods leads to the other options.
Question 14Introduction to Retail and Store Operations
Which measure best indicates that a store's shelf availability is being managed well?
- A high average value of each bill
- A low percentage of out-of-stock instances on core items Correct answer.
- A high number of daily price changes
- A large number of staff on the floor
Explanation
Shelf availability is measured by how often key products are present and purchasable. Fewer out-of-stock instances show that replenishment is working. Price changes, staffing and bill value do not directly measure shelf availability.
Question 15Introduction to Retail and Store Operations
An assistant notices that a customer has picked up a product and is looking around repeatedly without approaching anyone. What is the most appropriate service response?
- Follow the customer silently at a short distance
- Wait until the customer comes to the counter
- Announce store closing time to the customer
- Approach politely and offer help with product information Correct answer.
Explanation
Repeated looking around is a common signal that the customer needs assistance but is unsure how to ask. A polite offer of help meets the need without pressure. Ignoring the customer or following them can make the shopping experience uncomfortable.
Question 16Introduction to Retail and Store Operations
Which storage practice is most suitable for a store that keeps fragile glassware in its back room?
- Stacking cartons with protective padding and keeping heavy items below Correct answer.
- Placing cartons on the topmost shelf for easy visibility
- Storing glassware loose in open bins
- Stacking cartons directly on the floor near the entrance
Explanation
Fragile goods need protective packing and should not bear heavy loads, so heavy items go on lower levels. This reduces breakage during handling and storage. Top shelves, open bins and floor placement increase the risk of damage.
Question 17Introduction to Retail and Store Operations
A store's sales rose from ₹80,000 to ₹1,00,000 between two months. What is the percentage increase in sales?
- 20%
- 25% Correct answer.
- 125%
- 80%
Explanation
Percentage increase equals the change divided by the original value, multiplied by 100: (20,000 / 80,000) × 100 = 25%. This formula compares growth against the starting figure, not the final one. Using the final value as the base gives an incorrect result.
Question 18Introduction to Retail and Store Operations
A store manager finds that a fast-moving product is repeatedly out of stock while a slow-moving product occupies prime shelf space. Which action best addresses both problems?
- Remove both products from the shelf
- Increase the order quantity of both products equally
- Shift the fast mover to prime space and review the slow mover's order quantity Correct answer.
- Reduce the shelf space for the fast mover
Explanation
Prime shelf space should be allocated to products that sell quickly, while slow movers need smaller, reviewed orders to free up space and cash. This improves sales per square foot and reduces dead stock. Treating both products identically ignores their different performance.
Question 19Introduction to Retail and Store Operations
A store's opening stock is ₹2,00,000, purchases are ₹6,00,000 and closing stock is ₹1,50,000. What is the cost of goods sold?
- ₹9,50,000
- ₹6,00,000
- ₹5,50,000
- ₹6,50,000 Correct answer.
Explanation
Cost of goods sold equals opening stock plus purchases minus closing stock: 2,00,000 + 6,00,000 - 1,50,000 = ₹6,50,000. This figure is compared with sales to assess gross margin. Omitting opening stock or adding closing stock gives wrong results.
Question 20Introduction to Retail and Store Operations
A store wants to reduce shrinkage. Which combination of actions most directly targets the main causes of shrinkage?
- Increasing the number of promotional discounts
- Displaying more products at the billing counter
- Regular stock counts, careful billing checks and controlled access to stock areas Correct answer.
- Extending store opening hours
Explanation
Shrinkage mainly comes from theft, billing errors and administrative mistakes, so counts, checks and access control address the root causes. Promotions, longer hours and more counter displays affect sales volume rather than stock loss. A combined control approach is more effective than any single measure.
Question 21Store Layout, Display and Merchandising Basics
In a retail store, the area immediately inside the entrance where customers first enter and orient themselves is best used for which purpose?
- Storing surplus stock in sealed cartons
- Placing slow-moving clearance items at full price
- Installing the cash counter for quick billing
- Creating an open, welcoming zone with a few seasonal highlights Correct answer.
Explanation
The entrance zone, often called the decompression or welcome zone, lets shoppers slow down and adjust to the store. Keeping it relatively open with a small number of attractive highlights draws them inward without blocking movement. Cramming it with stock or billing counters creates congestion and prevents orientation.
Question 22Store Layout, Display and Merchandising Basics
A store arranges its floor so that customers must walk past several departments before reaching the billing counter. This layout technique is known as which of the following?
- Free-flow layout
- Decompression zone
- Directed flow path Correct answer.
- Grid layout
Explanation
A directed flow path deliberately guides the shopper's route through the store so that more merchandise is seen before checkout. It raises exposure to impulse and add-on products. Grid and free-flow layouts describe the arrangement of fixtures, not the guided route itself.
Question 23Store Layout, Display and Merchandising Basics
Which display technique places products at eye level on shelves because it is the most visible and easiest to reach zone?
- Eye-level display Correct answer.
- Bottom-shelf display
- Floor-stack display
- Top-shelf display
Explanation
Eye-level display, sometimes called the golden zone, uses the shelf band at the shopper's natural line of sight. Products here are seen first and reached most comfortably, so they usually sell better. Top and bottom shelves are less visible or require bending or stretching.
Question 24Store Layout, Display and Merchandising Basics
A shopkeeper wants to display a new brand of biscuits so that shoppers notice them without searching. Which placement is most suitable?
- At eye level beside the fast-selling biscuit brands Correct answer.
- In the stockroom until old stock is sold
- On the bottom shelf behind other brands
- On the topmost shelf above the aisle signage
Explanation
Placing a new product at eye level next to fast-selling brands borrows the attention those brands already attract. Shoppers scanning familiar products will notice the newcomer. Hiding the item on low shelves, in the stockroom, or above signage defeats the purpose of a launch display.
Question 25Store Layout, Display and Merchandising Basics
What is the main purpose of a planogram in a retail store?
- To list supplier phone numbers
- To show the exact placement of products on fixtures Correct answer.
- To track staff attendance
- To record daily cash sales
Explanation
A planogram is a diagram that specifies where each product should sit on a fixture, including shelf and position. It helps maintain a consistent, well-merchandised look across stores and shifts. Cash records, supplier lists, and attendance are administrative documents, not merchandising diagrams.
Question 26Store Layout, Display and Merchandising Basics
A store wants customers to move naturally from one side of the aisle to the other while browsing. Which aisle arrangement supports this?
- An aisle used mainly for storing empty cartons
- A narrow aisle blocked at the far end
- A curved or staggered aisle that reveals products gradually Correct answer.
- A straight aisle with identical shelving on both sides
Explanation
Curved or staggered aisles reveal merchandise gradually as the shopper moves, encouraging continued browsing. A straight uniform aisle is efficient but less engaging. Narrow or blocked aisles create frustration and discourage movement.
Question 27Store Layout, Display and Merchandising Basics
Which of the following is a key rule for keeping a merchandise display attractive during trading hours?
- Leave gaps on the shelf to show demand
- Mix unrelated categories on one shelf
- Remove price tags to reduce clutter
- Face products forward and keep labels aligned Correct answer.
Explanation
Facing up, or fronting, means pulling products to the shelf edge with labels turned outward so the display looks full and neat. Aligned labels help shoppers read product and price information quickly. Gaps, mixed categories, and missing price tags make the display look poorly managed.
Question 28Store Layout, Display and Merchandising Basics
A supermarket places a small rack of batteries and phone chargers next to the billing counter. Which merchandising principle does this mainly apply?
- Seasonal clearance of slow stock
- Cross-merchandising of impulse items at the point of sale Correct answer.
- Category management of fresh produce
- Planogram compliance for frozen foods
Explanation
Small, low-cost items that shoppers may buy without planning are impulse products. Placing them at the billing counter, where customers queue, uses cross-merchandising to capture last-minute purchases. This is not seasonal clearance, fresh produce management, or frozen food planning.
Question 29Store Layout, Display and Merchandising Basics
When building a promotional end-cap display at the end of an aisle, which combination is most effective?
- Empty cartons used as decoration
- A featured product, clear price signage, and adequate stock Correct answer.
- Many unrelated products with handwritten notes
- High price, low stock, and no signage
Explanation
An end-cap is a high-visibility selling location, so it should feature a clear product with prominent pricing and enough stock to meet the demand it attracts. Signage tells shoppers what the offer is. Unrelated goods or empty cartons waste the prime position.
Question 30Store Layout, Display and Merchandising Basics
A store notices that customers walk past a particular aisle without entering it. Which change is most likely to improve traffic into that aisle?
- Removing all signage from the aisle
- Placing a bright promotional display at the aisle entrance Correct answer.
- Narrowing the aisle entrance
- Stacking empty crates at the aisle mouth
Explanation
An attractive promotional display at the aisle entrance acts as a visual cue that draws shoppers in. It signals that something worth seeing is inside. Narrowing the entrance, removing signage, or blocking the mouth with crates all discourage entry.
Question 31Store Layout, Display and Merchandising Basics
Which statement best explains why heavy or bulky items are usually placed on lower shelves in a retail display?
- Lower shelves receive the most lighting
- It hides the products from competitors
- It reduces the risk of injury and makes lifting easier Correct answer.
- Lower shelves are the most profitable position
Explanation
Placing heavy or bulky products on lower shelves means staff and customers can lift them without reaching overhead. This reduces the risk of strain injuries and dropped goods. Profitability, concealment, and lighting are not the main reasons for this placement.
Question 32Store Layout, Display and Merchandising Basics
A retail assistant is asked to set up a 'price-point' display. What does this display concept mean?
- Arranging goods by supplier name
- Displaying only the highest-priced items
- Grouping products that all sell at the same or similar price Correct answer.
- Showing products without any price labels
Explanation
A price-point display groups items at the same or similar price so shoppers can quickly see the offer, for example a rack of items all at one low price. It simplifies choice and communicates value. It does not mean showing only premium goods, omitting prices, or sorting by supplier.
Question 33Store Layout, Display and Merchandising Basics
Which of the following best describes a free-flow store layout?
- A single straight path from entrance to checkout
- A layout where all products are kept behind the counter
- Fixtures arranged in an open, irregular pattern that allows customers to move freely Correct answer.
- Parallel aisles forming a strict grid
Explanation
A free-flow layout arranges fixtures and displays in an open, irregular way so shoppers can move in any direction. It suits boutiques and stores where browsing is encouraged. Grid layouts use parallel aisles, and a single path is a directed flow, not free-flow.
Question 34Store Layout, Display and Merchandising Basics
A store manager wants to increase sales of complementary products such as shirts and ties. Which merchandising approach is most appropriate?
- Placing ties only at the billing counter
- Displaying ties next to the matching shirts Correct answer.
- Placing ties in a separate distant aisle
- Keeping ties in the stockroom
Explanation
Cross-merchandising places complementary products together so that buying one item prompts consideration of the other. Displaying ties beside shirts makes the pairing obvious and convenient. Distant aisles, the stockroom, or a lone counter position reduce this association.
Question 35Store Layout, Display and Merchandising Basics
What is the primary reason for maintaining consistent shelf heights and fixture types across similar aisles in a store?
- To make the store easier to navigate and merchandise consistently Correct answer.
- To reduce the number of staff needed
- To prevent customers from finding products
- To increase the cost of fixtures
Explanation
Uniform shelf heights and fixtures create a predictable layout that helps shoppers navigate and lets staff apply planograms consistently. Consistency supports efficient stocking and a tidy appearance. It is not intended to cut staff, raise costs, or hinder shoppers.
Question 36Store Layout, Display and Merchandising Basics
A shop displays umbrellas and raincoats near the entrance during the monsoon season. Which merchandising concept does this illustrate?
- Category rationalisation
- Planogram compliance
- Dead-stock clearance
- Seasonal merchandising Correct answer.
Explanation
Seasonal merchandising highlights products that match current weather, festivals, or events. Displaying umbrellas and raincoats in the monsoon makes them relevant and easy to find. Dead-stock clearance, category rationalisation, and planogram compliance are different merchandising activities.
Question 37Store Layout, Display and Merchandising Basics
Which of the following is the best example of a 'silent seller' in a retail store?
- A staff member demonstrating a product
- A well-designed display that communicates the product's benefits without staff help Correct answer.
- A radio advertisement for the store
- A supplier visiting the store
Explanation
A silent seller is a display, sign, or arrangement that communicates product benefits and encourages purchase without a salesperson. Good signage and attractive presentation do the selling. Staff, radio ads, and supplier visits are not in-store silent selling elements.
Question 38Store Layout, Display and Merchandising Basics
A store's high-margin beauty products are currently placed on the bottom shelf. What is the most logical merchandising change?
- Keep them on the bottom shelf to save space
- Move them to the stockroom
- Place them only in the billing queue
- Move them to eye level to improve visibility and sales Correct answer.
Explanation
High-margin products benefit most from prominent placement because each sale contributes more profit. Moving them to eye level increases visibility and the chance of purchase. Keeping them low, storing them away, or limiting them to the billing queue reduces their selling potential.
Question 39Store Layout, Display and Merchandising Basics
In merchandising, what is meant by the term 'facing' a product?
- Stacking the product on the floor
- Removing the product from the shelf
- Pulling the product to the front edge of the shelf with its label visible Correct answer.
- Turning the product label away from the shopper
Explanation
Facing, also called fronting, means pulling products forward to the shelf edge and turning labels toward the shopper. This makes the shelf look full and helps shoppers read product information. Turning labels away, removing products, or stacking on the floor are not facings.
Question 40Store Layout, Display and Merchandising Basics
A store has a narrow entrance corridor that opens into a large sales floor. Which layout consideration is most important for this space?
- Blocking the corridor with promotional stands
- Using the corridor as a staff rest area
- Placing bulk stock in the corridor to use the space
- Keeping the corridor clear and using the open floor for decompression and displays Correct answer.
Explanation
A narrow entrance corridor should stay clear so customers can enter comfortably. The wider floor beyond it can serve as the decompression zone and display area. Filling the corridor with stock, stands, or staff facilities blocks access and creates a poor first impression.
Question 41Store Layout, Display and Merchandising Basics
A retailer wants to compare the effectiveness of two shelf arrangements for the same product range. Which approach gives the most reliable comparison?
- Test one arrangement for a fixed period, record sales, then test the other under similar conditions Correct answer.
- Compare sales of different products in different stores
- Ask one customer which arrangement they prefer
- Change the arrangement and the product range at the same time
Explanation
A fair comparison requires changing only the shelf arrangement while keeping the product range, price, and period similar. Recording sales for each arrangement under comparable conditions isolates the effect of the layout. Changing multiple factors or relying on one opinion gives unreliable results.
Question 42Store Layout, Display and Merchandising Basics
A store places a 'buy one, get one free' offer on a slow-moving product at the end of an aisle. Sales rise sharply during the promotion but fall back afterwards. What is the most reasonable interpretation?
- The product has become a permanent bestseller
- The promotion temporarily increased trial, but underlying demand is unchanged Correct answer.
- The product should be removed from the range immediately
- The shelf position is now permanently better
Explanation
A short-term sales spike during a promotion usually reflects the offer rather than a lasting change in demand. Once the promotion ends, sales often return to earlier levels. Concluding that the product is now a bestseller, that the position alone caused the rise, or that it must be delisted goes beyond the evidence.
Question 43Store Layout, Display and Merchandising Basics
A store's planogram requires a product to occupy four facings, but staff have reduced it to two to fit extra stock of another brand. What is the most likely merchandising consequence?
- Reduced visibility of the planned product and a less balanced shelf Correct answer.
- Better alignment with the store's category plan
- Improved planogram compliance and clearer presentation
- Lower stock levels for the competing brand
Explanation
Reducing facings below the planogram cuts the planned product's visible space, making it harder for shoppers to find. The shelf becomes unbalanced and no longer matches the category plan. Planogram compliance falls rather than improves, and the competing brand gains space rather than losing it.
Question 44Store Layout, Display and Merchandising Basics
A store wants to reduce shrinkage of small, high-value items such as cosmetics while keeping them visible to shoppers. Which display approach best balances sales and security?
- Keep them in the stockroom and show empty packaging
- Place them in an open bin near the exit
- Scatter them across several distant aisles
- Display them in a locked case close to a staffed counter Correct answer.
Explanation
A locked case near a staffed counter keeps small, high-value items visible while adding a physical barrier and staff oversight. This reduces theft without hiding the products completely. Open bins near exits, stockroom-only storage, or scattering items increase risk or reduce sales.
Question 45Stock Receiving, Storage and Inventory Handling
In a store's goods receipt process, what is the main purpose of matching the delivery challan with the purchase order before unloading?
- To calculate the retail selling price of each item for shelf labelling
- To confirm that the quantity and item description received are what the store actually ordered Correct answer.
- To decide which supplier will be paid first at the end of the month
- To record the attendance of the unloading labour gang
Explanation
The delivery challan is compared with the purchase order so that only the ordered items and ordered quantities are accepted at the gate. This prevents short supply, wrong-item supply and later reconciliation disputes with the vendor. Pricing and labour records are handled by separate documents.
Question 46Stock Receiving, Storage and Inventory Handling
A consignment of 40 cartons arrives and each carton is marked '12 pcs'. On opening, one carton contains only 10 pcs. What is the correct immediate action of the receiving assistant?
- Accept the full consignment and adjust the shortage in the next delivery
- Sell the short carton first so the shortage is not noticed
- Return the entire consignment to the supplier without any record
- Note the short quantity in the receiving report and get it countersigned by the delivery person Correct answer.
Explanation
Shortages must be recorded at the point of receipt and countersigned by the carrier so the store has documented proof for a claim. Accepting silently or returning everything without a record removes the evidence needed for reconciliation. The shortage note protects both quantity records and supplier settlement.
Question 47Stock Receiving, Storage and Inventory Handling
Which storage practice best protects moisture-sensitive cartons of packaged food in a godown?
- Storing them under the water tank to save shelf space
- Piling them against the outer wall to reduce aisle width
- Placing them on pallets or dunnage away from walls with ventilation gaps Correct answer.
- Stacking them directly on the floor near the entrance for quick movement
Explanation
Pallets or dunnage lift stock off the floor, and gaps from walls allow air movement that limits dampness and pest hiding places. Direct floor contact and wall contact trap moisture and damage cartons. Keeping stock near entrances or water sources increases spoilage risk.
Question 48Stock Receiving, Storage and Inventory Handling
In a store, the abbreviation FIFO on a shelf label mainly instructs staff to do which of the following?
- Issue the stock with the longest remaining shelf life first
- Issue the stock that was received earliest before newer stock of the same item Correct answer.
- Issue the stock kept nearest the billing counter first
- Issue the stock with the highest unit cost first
Explanation
FIFO means first in, first out: older receipts are issued or sold before newer receipts of the same item. This reduces expiry and deterioration of stock held over time. Cost, location and remaining shelf life are not the basis of FIFO rotation.
Question 49Stock Receiving, Storage and Inventory Handling
A store holds 250 units of an item at the start of the month. During the month it receives 400 units and issues 520 units. What is the closing balance?
- 170 units
- 130 units Correct answer.
- 150 units
- 120 units
Explanation
Closing stock equals opening stock plus receipts minus issues, that is 250 + 400 - 520 = 130 units. The formula keeps the stock ledger self-checking. Any difference from physical count then points to a recording or handling error.
Question 50Stock Receiving, Storage and Inventory Handling
Why is a bin card kept physically at or near the storage location of the item?
- To list the names of staff on leave
- To display the selling price to customers
- To serve as the supplier's invoice copy
- To record receipts and issues of that item at the point of movement Correct answer.
Explanation
A bin card is a location-level record of quantities received and issued for a specific item, updated as movement happens. Keeping it at the bin makes the update immediate and reduces mismatch with the central ledger. It is not a pricing display or a supplier document.