Which of the Following Statements About Inventory Turnover Is Most

question 60

Multiple Choice

Which of the following statements about inventory turnover is most appropriate?

• A) Companies generally strive to have the highest possible inventory turnover ratio.
• B) A high ratio indicates the company is having trouble selling its inventory.
• C) The most profitable turnover ratio may not necessarily be the highest.
• D) A low ratio generally means the company is not keeping enough inventory on hand.

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Definitions:

Journal Entry

Journal entry is the method by which financial transactions are recorded in an organization's accounting records, specifying the accounts affected and the direction (debit or credit) of the transaction.

Bank Statement

A monthly document provided by a bank detailing all transactions in an account, which can include deposits, withdrawals, service charges, and interest earned.

NSF Check

A check that a bank has declined to honor because the account on which it was drawn does not have sufficient funds.

EFT Deposit

Stands for Electronic Funds Transfer deposit, a method of transferring money directly from one bank account to another electronically.