Which of the Following Policies Would Increase a Firm's Current

question 44

Multiple Choice

Which of the following policies would increase a firm's current inventory turnover ratio?

• A) Reduction of the average inventory that supports a constant amount of sales
• B) An decrease in the units of inventory sold while holding average inventory constant
• C) Increase of inventory by adopting a Just-in-Time production schedule
• D) Saving new purchases of inventory until the following year instead of this year

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Definitions:

Initial Cash Sale

The revenue received from the first sale of goods or services for cash, excluding credit transactions.

Journal Entries

Recorded business transactions in the accounting ledger, detailing the financial effects on the company's accounts.

Stated Value

A value assigned to no-par value stock by the company's board of directors to define a minimum legal capital.

Common Stock

A type of equity security that represents ownership in a corporation, with rights to vote on corporate policy and receive dividends.