Which One of the Following Is Not an Assumption of the EOQ

question 188

Multiple Choice

Which one of the following is not an assumption of the EOQ model?

• A) Decisions for one item can be made independently of decisions made for other items.
• B) There is no uncertainty in lead-time.
• C) The amount of an order received is exactly equal to what was ordered, without any "short shipments" from a supplier or scrap losses in the shop.
• D) Quantity discounts can be taken advantage of for large lot sizes.

---

Definitions:

Proportional Consolidation Method

An accounting method used when a parent company jointly controls a business entity, consolidating only their proportionate share of the entities' assets, liabilities, and operations.

Consistent

refers to the uniform application of accounting policies and procedures in financial reporting across periods.

Entity Concept

An accounting principle that treats a company as a separate legal and accounting entity distinct from its owners or other companies.

Full Consolidation

An accounting method where the parent company integrates the financial statements of all its subsidiaries, regardless of the percentage of ownership, into one consolidated set of financial statements.