Effective Use of Inventories Would Be Implied from Which of the Following

question 155

Multiple Choice

Effective use of inventories would be implied from which of the following?
I.High number of back orders
II.Low inventory turnover
III.High numbers of days of inventory

• A) I and II
• B) I and III
• C) II and III
• D) I, II, and III
• E) None of the choices.

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Definitions:

Inventory Account

An account in financial accounting that tracks the value of a company's goods intended for sale, including raw materials, work-in-progress, and finished goods.

Legal Title

The formal right of ownership of property, which is recognized and protected by law.

Perpetual Inventory System

An accounting method that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management software.

Purchases Account

A ledger account in which the total amount of goods purchased during a period is recorded.