The Practice Whereby a Manufacturer Has Inventories of Materials on Consignment

question 27

Multiple Choice

The practice whereby a manufacturer has inventories of materials on consignment from its suppliers falls under the scope of

• A) electronic inventory control.
• B) vendor- managed inventories.
• C) virtual distribution.
• D) inventory pooling control.

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Definitions:

Trading Securities

Financial instruments bought and held primarily for selling them in the short term to profit from their price changes, recorded as current assets on the balance sheet.

Fair Value

The estimated market price of an asset or liability that is agreed upon by a willing buyer and seller in an arm's length transaction.

Financial Statements

Documented accounts that describe an enterprise's monetary operations and situation, featuring the balance sheet, income statement, and cash flow statement.

Available-For-Sale Securities

Available-For-Sale Securities are financial assets that are not classified as held-to-maturity or trading securities. These can be sold in response to liquidity needs or changes in interest rates, market conditions, or investment strategies.