An Increase in the Inventory Turnover Indicates

question 87

Multiple Choice

An increase in the inventory turnover indicates

• A) the company is selling its inventory more frequently.
• B) the company's cost of goods sold has decreased.
• C) the company's average inventory has increased.
• D) the company's profitability has improved.

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Definitions:

Financial Reporting

The process of producing statements that disclose an organization's financial status to management, investors, and the government.

Tax Reporting

The process of filing income, sales, and other tax returns accurately and timely to comply with governmental regulations.

Excess Capacity

A situation where a company can produce more goods than the market demands, indicating underused resources or a need for adjustment in production levels.

Selling Price

The amount of money for which a product or service is sold to the consumer, not necessarily reflective of the total price or production costs.