Ordering a Fixed Number of Items Every Time an Inventory

question 70

Multiple Choice

Ordering a fixed number of items every time an inventory level falls to a predetermined point is called:

• A) fixed quantity inventory.
• B) break-even quantity.
• C) quality control.
• D) economic order quantity.
• E) inventory control.

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Definitions:

Adjusting Journal Entry

Adjustments made in the financial books at the period's end to accurately distribute profits and costs to the period they belong.

Net Income

The amount of money that remains after all operating expenses, interest, taxes, and preferred stock dividends have been deducted from a company's total revenue.

Assets

Resources owned or controlled by a business that are expected to produce future economic benefits.

Prepaid Rent

An asset account showing the amount of rent payments made ahead of time, indicating rent that has been paid but not yet incurred.