The Effect of Increasing the Targeted (I

question 47

Multiple Choice

The effect of increasing the targeted (i.e., desired) ending inventory for a given budget period has the following effect on the production budget for the period:

• A) Increases the required production for the budget period.
• B) Has no effect on the required production for the budget period.
• C) Has an indeterminate effect (i.e., additional information is required before the question can be answered).
• D) None of these answer choices are correct.

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Definitions:

Cash Payments Journal

A financial journal that records all cash outflows or payments made by a business, including expenses, debt payments, and purchases.

Credit To Cash

A transaction in accounting where a credit sale is paid off, converting receivables into cash.

Accounts Payable

Liabilities of a business that represent money owed to suppliers or creditors for goods and services received.

Accounts Payable Subsidiary Ledger

A detailed record used to track amounts owed to suppliers or creditors separate from the general ledger.