Which of These Is Not an Advantage of a Shorter

question 37

Multiple Choice

Which of these is not an advantage of a shorter inventory turnover period?

• A)It means fewer funds are tied up in inventory so more are available for use in the business.
• B)It means less storage space is needed for inventory.
• C)It means that management can have the cost advantage of buying in bulk.
• D)It means that inventory is less likely to become obsolete or out of date.

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Definitions:

Alternative Minimum Tax

A parallel tax system to the regular income tax that ensures that certain taxpayers pay at least a minimum amount of tax.

Corporations

Legal entities that are separate from their owners, capable of owning property, entering contracts, and being taxed.

Subject

A broad term typically referring to the main topic or person being discussed or studied.

Schedule M-1

A form used by corporations in the U.S. to reconcile income reported for tax purposes with income reported for financial reporting purposes.