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:

Intangible Property

Assets that have no physical presence but have value, such as copyrights, trademarks, and patents.

Bank Accounts

Financial accounts maintained by individuals or businesses with a bank, allowing for the deposit and withdrawal of money and other financial transactions.

Stocks

Shares of ownership in a company, representing a claim on part of the company's assets and earnings.

Purchase

Purchase refers to the act of obtaining goods or services in exchange for money or other valuable consideration.