The statement that is not correct is:
A) A business will prefer a longer average inventory turnover time rather than a shorter turnover time.
B) A business will prefer a shorter settlement time for its accounts receivable rather than a longer settlement period.
C) An asset turnover figure of 1.5 times is preferred to a figure of 1.2 times.
D) None of the statements, i.e. all are correct.

Question

Quizplus · Accepted Answer

A business would prefer a shorter average inventory turnover time, as this indicates that they are able to sell their inventory faster and keep their cash flow moving. A longer turnover time can indicate that inventory is not selling as quickly, which can lead to cash flow problems.

The Statement That Is Not Correct Is