Which of the Following Statements Is TRUE of a Good

question 104

Multiple Choice

Which of the following statements is TRUE of a good merchandise inventory control system?

• A) It eliminates the need for authorization of merchandise purchases.
• B) It ensures that a physical count of inventory is not required.
• C) It often prevents the company from a stockout.
• D) It eliminates the need to examine inventory purchases for damage.

Evaluate the effects of changes in the sales mix on the break-even point and profitability.

Understand the calculation and implications of margin of safety in financial planning.

Understand the concept of the break-even point and how it is depicted on a CVP graph.

Recognize the impact of changes in sales, variable expenses, and fixed expenses on a company’s financial performance.

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Definitions:

Hypothesis

A statement that attempts to predict or to account for a set of phenomena; scientific hypotheses specify relationships among events or variables and are empirically tested.

Axiom

A statement or proposition that is regarded as being established, accepted, or self-evidently true.

Corollary

A proposition that follows from one already proven, often seen as a natural consequence or result.

Theory

A system of ideas intended to explain something, based on general principles independent of the thing to be explained.