Question

14. In normal situation, it is favorable for the business to have high inventory
True or False?​

Answer 1

Answer:

The correct Answer is false

Answer 2

Introduction:

Inventory includes both raw materials required to manufacture items and finished goods for sale. On a company's balance sheet, it is categorized as a current asset.

Explanation:

Excess inventory might result in subpar goods and deterioration. If one has a lot of extra stock, chances are the owner has a poor inventory turnover, which indicates they don't flip all of the merchandise on a regular basis. Unfortunately, extra product on warehouse shelves can degrade and expire.

Therefore, the statement is false because it is normal for a business to have a high inventory level since it will increase the chances of loss.

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