Which Statement Relating to Inventory Is Not Correct

question 9

Multiple Choice

Which statement relating to inventory is not correct?

• A) It is a very active asset, continually being acquired, sold and replaced.
• B) It is classified as a non-current asset in the balance sheet.
• C) Another name for inventory is stock-in-trade.
• D) It makes up a significant portion of a retailer's assets.

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Definitions:

Crowding Out

A situation where increased public sector spending leads to a reduction in private sector spending, which can dampen or negate the intended stimulative effect of the government's expenditures.

Investment Spending

Expenditure on capital goods including buildings, machinery, and equipment, which is intended to increase future production.

Aggregate Expenditure

The total amount spent on goods and services in an economy at a particular time.

Federal Budget Deficits

The excess of federal government expenditures over its revenues within a given fiscal year, leading to borrowing or debt accumulation.