Which of the Following Terms Best Describes the Assumption Made

question 96

Multiple Choice

Which of the following terms best describes the assumption made in applying the four inventory methods?

• A)Goods flow
• B)Cost flow
• C)Asset flow
• D)Physical flow

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Definitions:

Zero Balance Accounts

A checking account in which a balance of zero is maintained by automatically transferring funds from a master account in an amount only large enough to cover checks presented.

Excess Funds

Surplus money available with an entity after all expenses and obligations have been met, which can be invested or saved for future use.

Ordering Costs

Expenses incurred in placing and receiving orders from suppliers, typically including costs related to processing, shipping, and receiving.

Inventory Held

The goods and materials that a business has in stock and available to sell at a given time.