The Higher the Inventory Turnover Measure,the

question 96

Multiple Choice

The higher the inventory turnover measure,the:

• A) faster a firm sells its inventory.
• B) faster a firm collects payment on its sales.
• C) longer it takes a firm to sell its inventory.
• D) greater the amount of inventory held by a firm.
• E) lesser the amount of inventory held by a firm.

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Definitions:

Hourly Wage Rate

The hourly wage rate is the amount of money paid to an employee for each hour of work performed.

Note Payable

A written agreement where one party promises to pay another party a specific sum of money on a certain date or upon demand.

Interest-Bearing Note

This is a debt instrument that pays interest to the holder at a fixed or variable rate until the maturity date or repayment of the principal amount.

Contingent Liabilities

Potential obligations that may arise depending on the outcome of a future event.