Which of the Following Is Not an Inherent Risk Associated

question 100

Multiple Choice

Which of the following is not an inherent risk associated with inventory?

• A)Inventory accounts typically have a high volume of activity.
• B)Inventory is easily transportable.
• C)Inventory may become obsolete.
• D)Inventory costing methods frequently change from one year to the next.

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Definitions:

Continuous-process Production

A manufacturing method where materials are continuously in motion, being processed, and transformed into finished goods without interruption.

Productivity Inefficiencies

Situations where resources are not utilized in the most effective way, leading to decreased output or increased costs without proportional benefits.

Lost Revenue

Refers to the money that a business could have earned but did not, due to various factors such as cancelled services or unsold inventory.

Profit

The financial gain obtained when the amount of revenue gained from a business activity exceeds the expenses, costs, and taxes needed to sustain the activity.