Explain How Inventory Can Act as a Buffer in the Production

question 91

Essay

Explain how inventory can act as a buffer in the production process.

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Definitions:

Operating

Pertains to the regular, ongoing activities of a business that are involved in the production or sale of goods and services.

GAAP

Generally Accepted Accounting Principles; a framework of accounting standards, rules and procedures defined by the professional accounting industry, used to compile financial statements.

FASB

The Financial Accounting Standards Board, an organization that establishes financial accounting and reporting standards in the United States.

Financial Accounting

The field of accounting focused on the summary, analysis, and reporting of financial transactions pertaining to a business, leading to the creation of financial statements.