All of the Following Are Considered to Be the Right

question 21

Multiple Choice

All of the following are considered to be the right reasons for investing in inventory except _____.

• A)avoid disruptions in operational performance
• B)unreliable supplier delivery
• C)support customer service requirements
• D)hedge against marketplace uncertainty
• E)take advantage of order quantity discounts

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Definitions:

Bonds Payable

Long-term liabilities represented by bonds that a company is obligated to pay back at a specified maturity date, including principal and interest.

Operating Activities

Activities that relate directly to the operation of the business for producing and delivering goods and/or services, reflected in the cash flow statement.

Issuing Debt

The process a company or government undergoes to raise funds by selling bonds or other financial instruments to investors.

Financing Activities

Activities that result in changes in the size and composition of the contributed equity and borrowings of a company, usually reported on the cash flow statement.