If Inventory Turnover Is Decreasing

question 14

Multiple Choice

If inventory turnover is decreasing:

• A)the company may be unable to move its inventory.
• B)the company may be overstating inventory.
• C)the company may be understating inventory.
• D)both A and B may occur.

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Definitions:

Transactions

Economic interactions or exchanges between parties that involve the transfer of goods, services, or funds.

Investing Activities

Transactions involving the purchase and sale of long-term assets and other investments not related to the day-to-day operations.

Net Cash Provided

The sum of cash inflows minus cash outflows over a period, typically highlighted in a company’s cash flow statement.

Market Securities

Financial instruments that are traded in financial markets, such as stocks, bonds, and derivatives, representing investment vehicles for owners.