Which of the Following Is Not True

question 280

Multiple Choice

Which of the following is not true?

• A)Inventory investment is very unstable.
• B)The purchase of inventory is considered an investment in calculating GDP.
• C)Inventory investment can be negative or positive.
• D)The purchase of software is considered an investment in calculating GDP.
• E)During severe recessions,inventory investment is positive.

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Definitions:

FIFO

An inventory valuation method that assumes that the first items put into inventory are the first ones sold.

Beginning Inventory

The value of a company’s inventory at the start of an accounting period, carried over from the end of the previous period.

Periodic Inventory System

An accounting method where inventory and cost of goods sold are determined at the end of a period through a physical count.

FIFO Inventory

A method of inventory valuation where the first items produced or acquired are the first ones sold, FIFO stands for "First In, First Out."