An Increasing Balance in the Inventory Account Accompanied by an Increase

question 193

Multiple Choice

An increasing balance in the Inventory account accompanied by an increase in the inventory turnover ratio would imply that the inventory build-up is occurring because:

• A)inventory is not selling as fast as anticipated.
• B)the company is expecting to sell more inventory in the future.
• C)inventory is selling,but it is taking longer to collect payment from customers.
• D)the economy is slowing down.

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Definitions:

Consumption Bundles

A combination of goods and services that an individual or household consumes over a given period.

Consumer

An individual or group who purchases goods and services for personal use.

Budget

A financial plan for a defined period, often one year, that allocates future personal income towards expenses, savings, and debt repayment.

Paperback Novels

Books printed on lower quality paper, bound in a soft cover, and typically less expensive than hardcover editions.