If a Company Desires to Increase Its Inventory, Then It

question 69

Multiple Choice

If a company desires to increase its inventory, then it should:

• A)sell more goods than it purchases during the period.
• B)purchase more goods than it sells during the period.
• C)purchase the same amount of goods that it sells.
• D)increase its selling prices to a level that customers would not be willing to purchase.

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Definitions:

Interest Charge

The amount charged by a lender to a borrower for the use of borrowed money, typically expressed as an annual percentage of the principal.

Dishonor Of Note Receivable

Occurs when a promissory note's maker fails to make the scheduled payment to the note's holder when due.

Accounts Receivable

Amounts of money owed to a company by its customers for goods or services that have been delivered but not yet paid for.

Allowance For Doubtful Accounts

A contra-asset account used to estimate the portion of accounts receivable that is expected not to be collectible due to credit sales.