Drop Shippers

question 223

Multiple Choice

Drop shippers

• A)own the merchandise they sell but do not physically handle,stock,or deliver it.
• B)perform all channel functions and sell on consignment to retailers.
• C)take title to merchandise but sell only to buyers that call on them,pay cash for merchandise,and furnish their own transportation for merchandise.
• D)have a small warehouse from which they stock their trucks for distribution to retailers.
• E)work for several producers and carry noncompetitive,complementary merchandise in an exclusive territory.

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Definitions:

Inventory Records

Documentation and tracking of the quantity, value, and turnover of a business's inventory, including raw materials, work-in-progress, and finished goods.

Overstated Beginning Inventory

An accounting error where the starting inventory level is recorded higher than it actually is, leading to inaccuracies in financial statements.

Lower of Cost or Market

An accounting principle that values inventory at the lower amount between its original cost and its current market price.

Inventory Valuation

The method used to assess the cost of unsold goods or materials held by a company, impacting financial reporting and taxation.