If a Firm's Inventory Decreases,the GDP Counts the Net Decrease

question 121

True/False

If a firm's inventory decreases,the GDP counts the net decrease as a reduction in investment.

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Definitions:

Perpetual Inventory System

This method for accounting inventory immediately notes down any purchase or sale through the use of computerized point-of-sale systems and enterprise asset management software.

FOB Shipping Point

A term indicating that the buyer assumes ownership and responsibility for goods at the seller's location, and pays for shipping costs.

FOB Destination

A shipping term indicating that the seller bears the cost and risk of transporting goods until they are delivered to the buyer's location.

Physical Inventory

The process of counting and verifying the actual stock in a business at a specific point in time.