Which Statement Below Is TRUE About the Purchase of Inventory

question 199

Multiple Choice

Which statement below is TRUE about the purchase of inventory?

• A)Large firms tend to have entire departments for purchasing and for accounts payable.
• B)All firms,large and small,need to keep detailed records of what they are buying and paying for.
• C)The person who records inventory purchases should not have access to the inventory.
• D)All of these statements are true.

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Definitions:

Profit Maximizing Output

The level of production at which a firm achieves the highest possible profit, determined by the point where marginal cost equals marginal revenue.

Demand Curve

A graphic representation showing how the quantity demanded of a good or service varies with its price.

Marginal Cost

The hike in complete costing that comes with the fabrication of an additional unit of a good or service.

Competitive Buyer

A buyer in a market who cannot influence the market price and takes the price as given.