Which of the Following Is Not a Guideline for Evaluating

question 125

Multiple Choice

Which of the following is not a guideline for evaluating small business purchasing and inventory control?

• A) Take advantage of all purchase discounts.
• B) Keep track of inventory holding costs.
• C) Use maximum quantities or economic ordering quantities.
• D) Keep track of optimum average inventory.

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Definitions:

Net Operating Income

A financial metric that calculates a company's operational profit by subtracting operating expenses from operating revenues.

Operating Income

Earnings before interest and taxes (EBIT), an indicator of a company's profitability from its core business activities, excluding non-operating income and expenses.

Break-even Point

The point at which total revenue equals total costs and expenses, resulting in neither profit nor loss.

Dollar Sales

The total value of sales made by a business within a certain period, measured in dollars.