The Longer the Inventory Remains Unsold,the Higher the Risk of

question 6

Multiple Choice

The longer the inventory remains unsold,the higher the risk of

• A)spoilage.
• B)damage.
• C)obsolescence.
• D)all of the above.

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Definitions:

Sales On Account

Transactions where goods are sold and payment is received at a later date, creating accounts receivable.

Cost Of Goods Sold

Represents the direct costs attributable to the production of the goods sold by a company.

Accounts Receivable Turnover

A financial ratio that measures how often a company collects its average accounts receivable balance within a period.

Income Statement

A financial statement that shows a company's financial performance over a specific period, detailing revenues, expenses, and profit or loss.