Which Statement About Inventories Is Correct

question 93

Multiple Choice

Which statement about inventories is correct?

• A)A reduction in inventories held would have no effect on the current ratio.
• B)An increase in inventories would have no effect on the current ratio.
• C)If a firm increases its sales while holding its inventories constant, then, other things held constant, its inventory turnover ratio will increase.
• D)A reduction in the inventory turnover ratio will generally lead to an increase in the ROE.

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Definitions:

Influence Process

The methods and techniques used by individuals or groups to alter the behavior, attitudes, or perceptions of others.

Leader-member Exchange

Describes the relationship dynamic between leaders and their team members, often highlighting the importance of mutual trust, respect, and obligation.

Relationship Quality

The perceived value or excellence of an interaction or relationship, based on factors like trust, satisfaction, and commitment.

Position Power

The authority or influence conferred by one's rank or official standing within an organization.