The Procedures of the Firm Used to Determine the Levels

question 340

Multiple Choice

The procedures of the firm used to determine the levels for demand-dependent inventory types such as work-in-progress and raw materials are called ____________________.

• A) First-in, first-out methods.
• B) The Baumol model.
• C) Net working capital planning.
• D) Economic order planning.
• E) Materials requirements planning.

---

Definitions:

Consuming Goods

Goods that are used by consumers and are typically expended when used, opposed to durable goods which are designed to last for a prolonged period.

Generating Revenues

Generating revenues refers to the process through which a business earns money by selling goods or providing services.

Expenses

Outflows or other using up of assets or incurrences of liabilities during a period from delivering or producing goods, rendering services, or carrying out other activities that constitute the entity’s ongoing major operations.

Increase Side

In accounting, it refers to the side of a ledger account (debit or credit) where increases are recorded, depending on the nature of the account.