Which of the Following Statements Is Most Consistent with Efficient

question 45

Multiple Choice

Which of the following statements is most consistent with efficient inventory management? The firm has a

• A) below-average inventory turnover ratio.
• B) low incidence of production schedule disruptions.
• C) below-average total assets turnover ratio.
• D) relatively high current ratio.
• E) relatively low DSO.

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Definitions:

Fees Earned

Revenue from providing services.

Purchases Journal

The purchases journal is a specialized accounting ledger that tracks all purchase transactions of a business, including inventory purchases on credit.

Supplies Account

An account in the general ledger that records the amount spent on supplies that are used in the operation of a business.

General Journal

A ledger where all financial transactions of a business are initially recorded using double-entry bookkeeping.