Additional Inventory Kept Over and Above the Average Amount Required

question 21

Multiple Choice

Additional inventory kept over and above the average amount required to meet demand is called ____ inventory.

• A)Seasonal
• B)Work-in-process
• C)Finished goods
• D)Safety stock

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Definitions:

Merchandise Purchased

The total cost of goods bought for resale during a specific accounting period.

Purchases Discounts

A reduction in the price of goods that a buyer can take advantage of if they pay by a certain date.

Periodic Inventory System

An inventory method where updates to inventory levels are made at specified periods, typically at the end of a financial year, rather than continuously.

Periodic Inventory System

An inventory accounting method where inventory levels and cost of goods sold are calculated at set intervals, such as monthly or yearly.