Which Statement About Inventories Is Correct

question 93

Multiple Choice

Which statement about inventories is correct?

• A)A reduction in inventories held would have no effect on the current ratio.
• B)An increase in inventories would have no effect on the current ratio.
• C)If a firm increases its sales while holding its inventories constant, then, other things held constant, its inventory turnover ratio will increase.
• D)A reduction in the inventory turnover ratio will generally lead to an increase in the ROE.

---

Definitions:

Feeding Tube Clogging

The obstruction of a tube used for providing nutrition directly into the stomach or small intestine, often caused by formula thickening or medication residue.

Barrel Syringe

A medical device used for injecting or withdrawing fluids, consisting of a cylindrical barrel, a plunger, and often a needle.

Solid Medications

Forms of medication that are delivered orally in a solid form, such as tablets or capsules, as opposed to liquid forms.

Nutritional Needs

The specific dietary requirements necessary for maintaining health, growth, and optimal body function.