Each of the Following Is a Component of Inventory Carrying

question 39

Multiple Choice

Each of the following is a component of inventory carrying cost except:

• A)accounting cost.
• B)storage cost.
• C)shrinkage cost.
• D)interest cost.

---

Definitions:

Straight-Line Method

A process for figuring out depreciation or amortization by spreading the asset’s price evenly over its operational life.

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, reflecting the decline in its value over time.

Gain or Loss

The financial result of selling an asset for more or less than its purchase price, respectively.

Fixed Asset Turnover

A financial ratio that measures a company's effectiveness in generating revenue from its fixed assets, such as property, plant, and equipment.