Which of the Following Statements Concerning ABC Analysis Is False

question 58

Multiple Choice

Which of the following statements concerning ABC analysis is false?

• A)Class B items typically account for 20 percent of the company's business in dollars.
• B)There are typically less class A items in stock than class B.
• C)Class C items typically account for 70 percent of the company's inventory items.
• D)Class C items tend to have more complex inventory policies than Class B items.

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Definitions:

Income Statement

A financial report that shows a company's revenues, expenses, and profit or loss over a specific period of time.

Owner's Equity Statement

A financial document showing the starting balance, additions and subtractions, and the ending balance of the owner’s equity account.

Freight-In

The cost associated with transporting goods into a business from suppliers, considered part of the cost of purchasing inventory.

Income Statement

A financial statement that shows the company's revenue and expenses over a specific period, resulting in net profit or loss.