Which of the Following Is/are Not True Regarding a Merchandising

question 139

Multiple Choice

Which of the following is/are not true regarding a merchandising firm?

• A)Inventory appears on the merchandiser's balance sheet initially as an asset.
• B)Inventory is measured at acquisition cost.
• C)When a sale takes place, the firm recognizes the cost of the inventory as an expense (cost of goods sold) on the income statement.
• D)When a sale takes place, the firm recognizes the inventory reduction on the statement of cash flows.
• E)All of the above are false regarding a merchandising firm.

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Definitions:

Mathematical Model

A symbolic representation of real-world phenomena using variables, equations, and/or logical relationships to describe and predict behaviors or outcomes.

Stockout Cost

The cost associated with running out of stock, including lost sales, backorders, and potentially reduced customer satisfaction and loyalty.

Inventory Holding Cost

Expenses related to storing unsold goods, including warehousing, insurance, depreciation, and opportunity costs.

Subcontractingcost

The expense incurred when a business hires outside contractors to perform tasks that could be done internally or as part of a project.