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

Question

Quizplus · Accepted Answer

A longer average inventory turnover time means that a business is taking longer to sell its inventory and could indicate poor sales or inefficient inventory management, so a shorter turnover time is preferred. The other statements are correct as a shorter settlement time for accounts receivable means the business gets paid faster, and a higher asset turnover figure indicates more efficient use of assets.

Which Statement Is Not Correct