A Rising Balance in the Inventory Account and a Falling

question 36

Multiple Choice

A rising balance in the inventory account and a falling inventory turnover ratio implies that the inventory build up is occurring because:

• A) goods are not selling as fast as they were in the past.
• B) the company is expecting to sell more in the future.
• C) goods are selling, but it is taking longer to collect payment.
• D) goods cannot be shipped fast enough.

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Definitions:

Executive Decisions

High-level choices or judgments made by senior management in an organization, often involving strategic directions, policy formulations, and the allocation of significant resources.

Perceptual Errors

are mistakes in judgment that occur when an individual misinterprets sensory stimuli and information from the environment.

Stereotyping

Assigning fixed, generalized attributes to a group of people, often leading to prejudice and discrimination.

Discrimination

Unfair or prejudicial treatment of individuals based on certain characteristics such as race, gender, age, or sexual orientation, rather than on their merits.