With Respect to Inventory,which of the Following Is Correct

question 117

Multiple Choice

With respect to inventory,which of the following is correct?

• A) Inventory is not an asset.
• B) All inventory is an asset except work-in-process inventory.
• C) Factoring inventory is generally a bad idea.
• D) Finished goods inventory is twice the value of work-in-process inventory.
• E) Rolls of denim at a Levi's factory is raw materials inventory.

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Definitions:

Above Average Profits

Earnings that surpass the norm or average level within a particular industry or market.

Perfectly Elastic Demand

A market situation where demand for a product can drastically change to infinity with the slightest change in its price.

Inelastic Demand

A situation where the demand for a product does not change significantly with a change in price.

More Elastic Demand

A situation where the demand for a product is more sensitive to changes in price, meaning quantities demanded change significantly even with small price fluctuations.