ABC Analysis Divides On-Hand Inventory into Three Classes, Generally Based

question 156

Multiple Choice

ABC analysis divides on-hand inventory into three classes, generally based upon which of the following?

• A) item quality
• B) unit price
• C) the number of units on hand
• D) annual demand
• E) annual dollar volume

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Definitions:

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time, providing a basis for computing rates of return and evaluating its capital structure.

Sales On Account

Transactions where goods or services are sold with payment to be received at a later date, often documented through invoices.

Cost Of Goods Sold

Direct expenditures linked to the making of products that a company offers for sale.

Average Collection Period

The typical duration in days for a business to collect payments due from its clients.