What Types of Businesses Usually Hold Significant Quantities of Inventory

question 53

Multiple Choice

What types of businesses usually hold significant quantities of inventory?

• A) Manufacturing and wholesale
• B) Wholesale and retail
• C) Manufacturing, wholesale and retail
• D) Retail, manufacturing and service

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Definitions:

Freight In

The cost associated with transporting goods from suppliers to the recipient, typically recorded as part of inventory cost.

Net Purchases

The total amount of purchases after subtracting any returns, allowances, and discounts over a specific period.

Purchase Returns

Occurs when a buyer returns merchandise that it had purchased from a supplier, often due to issues like defects or dissatisfaction.

Purchase Discounts

Reductions in the purchase price of goods, often granted by suppliers for early payment.