Which One of the Following Would Generally Reduce the Carrying

question 23

Multiple Choice

Which one of the following would generally reduce the carrying costs of inventory?

• A) Increasing the spoilage rate
• B) Carrying more fad-sensitive goods
• C) Experiencing a decrease in the overall interest rate
• D)Increasing the need to sell securities

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Definitions:

Asset

An economic resource owned or controlled by a person or entity, which is expected to provide future benefits.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting its liabilities; represents the owners' share.

Current Assets

Current assets are all assets that a company expects to convert to cash or use within one year, such as inventory, accounts receivable, and cash.

Stockholders' Equity

Ownership equity represented by the leftover interest in a corporation's assets once its liabilities have been subtracted.