A Low Number of Days in Inventory May Indicate All

question 56

Multiple Choice

A low number of days in inventory may indicate all of the following except

• A)Sales opportunities may be lost because of inventory shortages.
• B)There is less chance of having obsolete inventory items.
• C)The company has fewer funds tied up in inventory.
• D)Management has achieved the best balance between too much and too little inventory levels.

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Definitions:

Partnership Interest

An ownership share in a partnership, representing the holder's proportionate rights and obligations in the partnership's profits, losses, and capital.

Self-Employment Income

Income generated from business or trade activities where there is no employer-employee relationship, requiring the payer to file taxes independently.

Ordinary Income

Income earned from providing services, including wages, salaries, tips, and commissions, as well as income from investments that are not considered capital gains.

Nondeductible Items

Expenses or items that cannot be subtracted from gross income to reduce taxable income according to tax laws.