A Friend of Your Works for a Local Electric Products

question 75

Essay

A friend of your works for a local electric products distributor and has been put in charge of the inventory count at year end. He has been told that he needs to make sure that he includes all of the inventory the company owns in his count, even those items that are not physically on the premises. He is confused by this. He knows that you are studying accounting and business and asks for your help. What explanation do you provide?

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Definitions:

Real GDP

Gross Domestic Product after adjustments for inflation; measures the value of all goods and services produced within a country's borders in a specific time period using constant prices.

Deflation

A decrease in the general price level of goods and services, often leading to an increase in the real value of money.

Inflation

The progression at which the price level for goods and services at large advances, lessening the potency of purchasing.

Housewives

Individuals, traditionally women, who manage households and may or may not engage in paid employment outside the home.