A Rising Balance in the Inventory Account and a Falling

question 88

Multiple Choice

A rising balance in the inventory account and a falling inventory turnover ratio implies that the inventory build up is occurring because:

• A)goods are not selling as fast as anticipated.
• B)the company is expecting to sell more in the future.
• C)goods are selling,but it is taking longer to collect payment.
• D)goods cannot be shipped fast enough.

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Definitions:

Subject Matter

Refers to the topic, content, or substance of a legal case or document, which determines the jurisdiction and legal principles applicable.

Contract

An accord between several parties that carries legal weight and can be imposed by the law.

Voidable

A term referring to a contract or transaction that remains valid until one party decides to cancel or nullify it due to certain legal defenses.

Minor

An individual under the legal age of adulthood, which varies by jurisdiction but is commonly 18.