Using the ABC Classification System for Inventory, Which of the Following

question 86

Multiple Choice

Using the ABC classification system for inventory, which of the following is a true statement?

• A) The C items are of moderate dollar volume.
• B) You should allocate about 50 percent of the dollar volume to B items.
• C) The A items are of low dollar volume.
• D) The A items are of high dollar volume.
• E) Inexpensive and low usage items are classified as C no matter how critical.

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Definitions:

Fixed Assets

Long-term tangible assets used in the operation of a business that are not likely to be converted to cash in the short term, such as buildings, machinery, and equipment.

Financially Solvent

The ability of an individual or organization to meet its long-term financial obligations.

Cash Flow from Assets

A measure of the amount of cash generated by a company's investments in assets after accounting for financing and operations.

Positive

Characterized by or displaying affirmation or acceptance or certainty.