The Following Pairs Are All Benefits of Holding Inventory Except

question 56

Multiple Choice

The following pairs are all benefits of holding inventory except:

• A)receive discounts on large-volume purchases
• B)keep sufficient levels of raw materials to minimize disruptions in the production process
• C)minimize lost sales because of shortage
• D)reduce interest payments

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Definitions:

Debtor

An entity or person that owes money to another party.

Deposits

Deposits involve placing funds into a bank account or other financial institution for safekeeping, often earning interest over time.

Overdraft

A payment by a bank on behalf of a customer for more than the customer has on deposit.

Agent

A person authorized to act on behalf of another and subject to the other’s control in dealing with third parties.