All EXCEPT Which of the Following Statements About ABC Analysis

question 4

Multiple Choice

All EXCEPT which of the following statements about ABC analysis are true?

• A)In ABC analysis,inventory may be categorized by measures other than dollar volume.
• B)ABC analysis categorizes on-hand inventory into three groups based on annual dollar volume.
• C)ABC analysis is an application of the Pareto principle.
• D)ABC analysis suggests that all items require the same high degree of control.
• E)ABC analysis suggests that there are the critical few and the trivial many inventory items.

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Definitions:

Accountants

Professionals who perform financial functions related to the collection, accuracy, recording, analysis, and presentation of a business, organization, or individual's financial operations.

Cash Flow Method

An accounting technique that tracks the movement of cash in and out of a business, crucial for understanding its liquidity.

Statement of Owners' Equity

A financial document detailing the changes in ownership interest, including investments and withdrawals, over a period.