Which of the Following Is the Most Appropriate Regarding Inventory

question 3

Multiple Choice

Which of the following is the most appropriate regarding Inventory turnover?
A. Inventory turnover increases as average inventory decreases, while other things remain the same.
B. Inventory turnover is an efficiency measure.
C. Inventory turnover is unaffected by changes in annual sales.

• A) Choice A
• B) Choice B
• C) Choice C
• D) Choice A and B only.
• E) Choice A, B and C will hold.

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Definitions:

Capital Account

An account showing the net worth of a business at a specific point in time, including resources owned and liabilities owed.

Equity

The value of an owner's interest in a property or business, determined by subtracting liabilities from assets.

Income Ratios

Financial metrics that compare different components of a company's income statement, such as profit margins, to assess its financial performance.

Capital Balances

The amount of money that owners have invested in a company, not including any profits or losses.