Which of the Following Is a Consequence of a High

question 74

Multiple Choice

Which of the following is a consequence of a high inventory turnover?

• A) Improved employee morale
• B) A decrease in the cost of goods sold
• C) An increase in promotions and markdowns
• D) Higher risk of product obsolescence
• E) A decrease in profits

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Definitions:

External Reporting

The preparation and disclosure of financial statements and other information to parties outside the corporation, typically involving public companies.

Long-Term Assets

Assets that are expected to provide economic benefits beyond one year, including property, plant, equipment, and intangible assets.

Employee Wages

Compensation paid to employees for their labor, including salaries, hourly wages, and commissions.

Operating Expenses

The costs associated with the normal operations of a business, such as salaries, rent, and utilities.