An Advantage of the Fixed-Period Inventory System Is That

question 26

Multiple Choice

An advantage of the fixed-period inventory system is that:

• A) safety stock will be lower than it would be under a fixed-quantity inventory system.
• B) there is no physical count of inventory items when an item is withdrawn.
• C) no inventory records are required.
• D) orders usually are for smaller order quantities.
• E) the average inventory level is reduced.

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Definitions:

Depreciation

The method by which a business deducts the cost of tangible assets over time, recognizing the decrease in value of assets.

Taxed

Refers to income, property, or purchases on which tax is imposed by governmental authorities.

Depreciation

The reduction in the value of an asset over time, particularly for tax purposes.

Equipment

Tangible property used in operations, such as machinery or computer hardware, which can often be depreciated for tax purposes.