At Equilibrium Expenditure, Unplanned Changes in Inventory

question 75

Multiple Choice

At equilibrium expenditure, unplanned changes in inventory

• A) must be positive.
• B) must be zero.
• C) must be negative.
• D) might be either positive or negative.

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Definitions:

Credit Sale

A transaction where goods or services are provided to a customer with an agreement to pay at a later date, typically involving invoicing.

FOB Shipping Point

A term used in shipping agreements indicating that the buyer is responsible for the goods once they leave the seller's premises.

Prepaid Freight

Costs paid in advance for the transportation of goods, which are typically recorded as a prepaid expense until the goods are delivered.

Merchandise Return

The process of a customer returning previously purchased merchandise back to the business, often leading to a refund or store credit.