ABC Classification Is an Inventory Control Method That Classifies Items

question 111

Multiple Choice

ABC classification is an inventory control method that classifies items based on

• A) Visual control
• B) How badly it is needed
• C) Alphabetical name of the items
• D) Dollar volume of sales each generates

---

Definitions:

Cash On Hand

Funds that a company or individual has available in cash form, not invested or deposited in financial institutions.

Zero-balance Account

A type of bank account that maintains a balance of zero by automatically transferring funds from a master account in amounts only large enough to cover checks presented.

Surplus Cash

Excess cash that a company holds over and above the minimum operational funds required, often used for investment, dividends, or buybacks.

Lockbox System

A service offered by banks to companies for the collection of payments from customers, wherein the payments are sent directly to a post office box, thereby speeding up collection times.