All of the Following Statements About ABC Analysis Are True

question 138

Multiple Choice

All of the following statements about ABC analysis are true except

• A) inventory may be categorized by measures other than dollar volume
• B) it categorizes on-hand inventory into three groups based on annual dollar volume
• C) it is an application of the Pareto principle
• D) it states that all items require the same degree of control
• E) it states that there are the critical few and the trivial many inventory items

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Definitions:

Negligent Misrepresentation

A false statement made carelessly that induces another party to enter into a contract, resulting in harm or loss.

Fraudulent Misrepresentation

A false statement made knowingly or recklessly designed to induce another party to enter into a contract.

Scienter

Knowledge of wrongdoing or fraudulent intent, often required to be proven in cases of securities fraud.

Unilateral Mistake

A situation in contract law where only one party is mistaken about a basic assumption on which the contract is based.