Maintaining Smaller Inventories Should Lead To

question 49

Multiple Choice

Maintaining smaller inventories should lead to:

• A) Less purchasing costs
• B) More storage costs
• C) Less shrinkage costs
• D) All of these are correct

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Definitions:

Perpetual Inventory System

An inventory accounting practice that instantly processes and records purchases or sales utilizing computerized point-of-sale systems alongside enterprise asset management software.

Merchandise

Products that are purchased and traded during business operations, usually in a retail or wholesale environment.

Perpetual Inventory System

An inventory management system that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management software.

Net Method

An accounting technique used for recording purchases where the purchase is recorded net of any trade discounts offered by the supplier.