Which of the Following Accounts Would Normally Have a Credit

question 25

Multiple Choice

Which of the following accounts would normally have a credit balance?

• A)Inventory
• B)Cost of goods sold
• C)Sales
• D)Sales returns & allowances

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Definitions:

Safety Stock

The quantity of inventory kept on hand to prevent stockouts, acting as a buffer against demand fluctuations and supply chain variability.

Ordering Cost

Expenses associated with placing orders for goods or materials, including clerical and administrative costs, transportation, and any costs related to the ordering process itself.

Holding Cost

The expenses associated with storing unsold goods or materials, including storage, insurance, and obsolescence.

Cost-Minimizing Solution

An approach in operations management aimed at finding the least expensive way to achieve a specific objective without compromising on quality.