An increasing balance in the inventory account and a declining inventory turnover ratio implies that the inventory build up is occurring because:
A)goods are not selling as fast as they were in the past.
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

An increasing balance in the inventory account and a declining inventory turnover ratio indicates that the company is holding onto more inventory for a longer period of time, which is usually because goods are not selling as quickly as they were in the past. This could be due to various reasons such as changes in consumer demand, competition, or economic conditions.

An Increasing Balance in the Inventory Account and a Declining