A Disadvantage of the Fixed-Period Inventory System Is That

question 119

Multiple Choice

A disadvantage of the fixed-period inventory system is that

• A) it involves higher ordering costs than the fixed quantity inventory system.
• B) additional inventory records are required.
• C) the average inventory level is decreased.
• D) since there is no order of inventory during the review period, a stockout is possible.
• E) orders usually are for larger quantities.

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Definitions:

Phase-Out

A gradual reduction or elimination of a tax benefit or deduction as a taxpayer's income reaches or exceeds certain thresholds.

Itemized Deductions

Eligible expenses that individuals can claim on their tax returns to reduce their taxable income, such as mortgage interest, medical expenses, and charitable donations.

High-Income Individuals

Persons with income levels significantly above the average, often subject to higher tax rates and financial strategies.

Schedule A

A form used in the U.S. to itemize deductions for taxes, including medical expenses, state and local taxes, and charitable contributions.