A Continuous Review System ______

question 67

Multiple Choice

A continuous review system ______.

• A)requires stringent monitoring of inventories because they have high value
• B)is best suited for the C category of items under the ABC classification scheme
• C)is also known as the annual inventory system
• D)is one where inventory replenishment is done annually

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Definitions:

Direct Method

A way of allocating service department costs directly to producing departments without any intermediate allocations, typically used in cost accounting.

Interdepartmental Services

Services provided between different departments within an organization, facilitating internal operations and support.

First-In, First-Out

A method of valuing inventory whereby the first items placed into inventory are the first ones considered sold.

Process Costing

A costing method used when homogenous products or services are produced in continuous processes.