A rising balance in the inventory account and a falling inventory turnover ratio implies that the inventory build up is occurring because:
A)goods are not selling as fast as anticipated.
B)the company is expecting to sell more in the future.
C)goods are selling,but it is taking longer to collect payment.
D)goods cannot be shipped fast enough.

Question

Quizplus · Accepted Answer

A rising balance in the inventory account means that the company is acquiring more inventory, while a falling inventory turnover ratio indicates that the company is selling goods less frequently. This suggests that the company is not able to sell its goods as quickly as expected, resulting in inventory build-up.

A Rising Balance in the Inventory Account and a Falling