Traditional ABC Classification Means That Inventory

question 54

Multiple Choice

Traditional ABC classification means that inventory

• A) is subject to the principles of activity-based costing.
• B) is managed according to the first in, first out (FIFO) rule.
• C) is tightly controlled for the A, B, and C classes of inventory.
• D) is classified according to demand times cost (demand * cost).

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Definitions:

Taxable Income

The amount of income that is subject to tax, after all deductions and exemptions are taken into account.

Intervals

Periods of time between events; in finance, it may refer to the frequency with which interest is applied or compounded.

Income Tax

Taxes that are based on the amount of taxable income that you earn.

Earned Income

Income derived from active participation in a business or trade, typically including wages, salaries, commissions, and tips.