How many of the following statements regarding inventory management is (are) true?
An increase in inventory levels is always a sign of inefficiency in inventory management.
The measurement of inventory affects both the balance sheet and the income statement within an accounting period.
The ending inventory of one accounting period becomes the beginning inventory of the next accounting period.
A) None
B) One
C) Two
D) Three

Question

Quizplus · Accepted Answer

- An increase in inventory levels is not always a sign of inefficiency in inventory management. In some cases, inventory levels may need to increase to meet customer demand or due to a decrease in supplier reliability.
- The measurement of inventory does affect both the balance sheet and the income statement within an accounting period.
- The ending inventory of one accounting period does become the beginning inventory of the next accounting period.

How Many of the Following Statements Regarding Inventory Management Is