In the A-B-C Classification System, Items Which Account for About

question 46

Multiple Choice

In the A-B-C classification system, items which account for about 60 percent of the annual dollar value, but only about 10 to 15 percent of the items in inventory, would be classified as

• A)A items.
• B)B items.
• C)C items.
• D)A items plus B items.
• E)B items plus C items.

---

Definitions:

Current Assets

Short-term assets that are expected to be converted into cash, sold, or consumed within one year or within the business's operating cycle, whichever is longer.

Current Liabilities

Obligations a company needs to pay off within one year or within its operating cycle, whichever is longer.

Free Cash Flow

The amount of cash a company generates after accounting for cash outflows to support operations and maintain its capital assets, indicating the company's ability to generate additional revenues.

Cash Flow from Assets

The total amount of money being transferred in and out of a business, especially from operational, investing, and financing activities.