Elinor Performs Ten Hours of House Cleaning for Zack in Exchange

question 49

Multiple Choice

Elinor performs ten hours of house cleaning for Zack in exchange for a promissory note for $400.At the time that Elinor accepts the note,she is aware that bankruptcy proceedings are being filed against Zack.Elinor

• A)can obtain HDC status.
• B)cannot obtain HDC status,because she knows that there are bankruptcy proceedings against Zack.
• C)cannot obtain HDC status,because she did not fulfill the value requirement.
• D)cannot obtain HDC status,because she did not fulfill the good faith requirement.

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Definitions:

Restocking Costs

Expenses incurred when replenishing inventory, including purchasing, shipping, and handling costs.

Average Inventory

Average inventory is a calculation that estimates the value or quantity of inventory a company holds over a specific period, helpful for assessing inventory management efficiency.

Carrying Cost

Carrying cost refers to the total cost of holding inventory, which includes warehousing, handling, depreciation, opportunity costs, and insurance.

Carrying Costs

Costs that rise with increases in the level of investment in current assets.