Inventory Turnover Measures the Average Number of Times That the Inventory

question 8

Multiple Choice

Inventory turnover measures the average number of times that the inventory is sold during the year. Its purpose is to measure the ____________ of the inventory.

• A) liquidity
• B) validity
• C) solvency
• D) profitability

---

Definitions:

Budgeting

The process of creating a financial plan to manage revenues, expenses, and resources over a specified period.

Goals and Objectives

Objectives are specific targets within the general framework of the overarching goals, guiding how to achieve broader aims.

Merchandiser Budget

A financial plan created by retailers detailing the forecasted revenues and expenses for a specific period, aiming to manage inventory, sales, and costs efficiently.

Manufacturer Budget

A detailed financial plan that projects the production costs, revenues, and resource requirements for a manufacturing company, subset of the master budget.