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:

Premium

An amount paid in excess of the normal or nominal value, often relating to the additional cost over the face value of securities or insurance charges beyond standard rates.

Bonds Payable

Long-term liabilities representing borrowed funds that a company is obliged to pay back with interest at specified times.

Valuation Account

An account used to adjust the carrying value of an asset or liability, such as an allowance for doubtful accounts or accumulated depreciation.