Generally,ordering Costs Are the Single Most Important Cost Element in Inventory

question 88

True/False

Generally,ordering costs are the single most important cost element in inventory management,because they are greater in magnitude than carrying costs.

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Definitions:

Lease Term

The fixed, non-cancellable period during which a lessee has the right to use an asset, plus any options to extend or terminate the lease if reasonably certain to be exercised.

Lease Criteria

The conditions and standards that a contract must meet for it to be classified as a lease under accounting standards.

Incremental Borrowing Rate

The interest rate a lessee would have to pay to borrow on a collateralized basis over a similar term to lease a similar asset, relevant in lease accounting.

Capital Lease

A lease agreement that has the characteristics of a purchase agreement, where the lessee assumes most of the risks and rewards of ownership.