Which of the Following Statements About Inventory Measures Is Not

question 48

Multiple Choice

Which of the following statements about inventory measures is not correct?

• A)If the inventory turnover ratio increases,the days to sell measure decreases.
• B)The days to sell measure can help managers make ordering decisions for inventory.
• C)A higher inventory turnover ratio indicates that inventory is moving more quickly from purchase to sale.
• D)It is rare for a company with a lower gross profit percentage to have a faster inventory turnover.

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Definitions:

Cash Budget

A financial plan that estimates cash inflows and outflows over a specific period, helping businesses manage their cash flow.

Equipment Scrapped

The disposal of assets, specifically industrial or manufacturing equipment, that are no longer useful and cannot be sold, often involving removal from the company's books and physical premises.