An increase in inventories indicates that?
A)More merchandise was purchased then the amount sold to customer
B)Less merchandise was purchased then sold to the customer
C)Not all purchases were cash
D)Cash payments were more than purchases on account

Question

Quizplus · Accepted Answer

An increase in inventories indicates that more merchandise was purchased than the amount sold to customers. This is because inventory levels rise when goods are bought or produced but not yet sold.

An Increase in Inventories Indicates That