Often Retailers Find the 80-20 Principle Evident Within the ABC

question 14

Multiple Choice

Often retailers find the 80-20 principle evident within the ABC analysis.What does this mean?

• A)about 20 percent of a retailer's sales promotion sold 80 percent of its inventory
• B)approximately 20 percent of a retailer's sales came from 80 percent of its products
• C)approximately 80 percent of a retailer's inventory was sold,and 20 percent was shrinkage
• D)80 percent of the retailer's customers were repeat customers,and only 20 percent were new
• E)approximately 80 percent of a retailer's sales came from 20 percent of its products

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Definitions:

Sale On Account

A transaction where goods are sold and payment is deferred to a later date, creating an account receivable for the seller.

Accounts Payable Subsidiary Ledger

A detailed ledger that breaks down the amounts owed by a business to its suppliers or vendors into individual accounts.

Purchases Journal

A special journal used to record all purchases of merchandise on credit, tracking the accumulation of goods over a period.

Equipment Purchased

The acquisition of physical assets like machinery or technology used in the production of goods or services.