Which of the Following Activities Would Not Affect the Inventory

question 78

Multiple Choice

Which of the following activities would not affect the inventory account for a company that uses the perpetual inventory system?

• A)Purchases
• B)Purchase returns
• C)Advertising
• D)Freight-in

---

Definitions:

Spending Variance

A financial metric that measures the difference between the budgeted or standard cost of production and the actual cost incurred.

Containers Refurbished

This term indicates reused or repaired containers to extend their lifecycle, making them functional for new purposes.

Indirect Materials

Materials used in the production process that are not directly traceable to a finished product, such as lubricants and cleaning supplies for machines.

Unfavorable Spending Variance

This occurs when the actual spending on something is higher than the budgeted or planned spending, indicating a cost management problem.