An Inventory System Is a Set of Policies and Controls

question 32

True/False

An inventory system is a set of policies and controls that monitors levels of inventory and determines what levels should be maintained, when stock should be replenished, and how large orders should be.

---

Definitions:

Financing Activities

Transactions involving long-term liabilities, equity, and changes in cash flows resulting from efforts to finance the company's operations.

Net Cash

The total amount of cash and cash equivalents a company has after deducting cash payments from cash receipts.

Accounts Receivable

Money owed to a business by its customers for goods or services that have been delivered but not yet paid for.

Indirect Method

An accounting technique used to allocate costs to specific cost objects indirectly, typically by using cost drivers or allocation bases.