An increasing balance in the inventory account and a faster inventory turnover ratio would imply 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)the economy is slowing down.

Question

Quizplus · Accepted Answer

If the balance in the inventory account is increasing and the turnover ratio is faster, this indicates that inventory is being sold quickly and more inventory is being added to meet anticipated future demand. This would align with choice B, where the company is expecting to sell more in the future.

An Increasing Balance in the Inventory Account and a Faster