If a business increases its inventories, the change is treated as an investment.

Name: If a business increases its inventories, the change is treated as an investment.
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When a business increases its inventories, it is considered as an investment in the company's assets. This is because inventories represent goods that the business can sell in the future to generate revenue. Therefore, the change in inventory is recorded as an asset on the balance sheet and not as an expense on the income statement.

If a Business Increases Its Inventories, the Change Is Treated