Which of the following statements regarding days inventory is incorrect?
A) Days inventory is much higher for a supermarket than a clothing retailer.
B) Days inventory is a measure of the average length of time it takes to sell inventory.
C) Days inventory is a measure of the efficiency of an entity at selling inventory.
D) All of the above options are incorrect.

Question

Quizplus · Accepted Answer

Days inventory is typically lower for a supermarket than a clothing retailer because supermarkets have a higher turnover rate due to the perishable nature of many of their goods. Clothing retailers may hold inventory for longer periods, especially for seasonal items.

Which of the Following Statements Regarding Days Inventory Is Incorrect