Multiple Choice
Which of the following statements regarding inventory errors is true?
132
views
5. Inventory
Inventory Errors
Multiple Choice
Which of the following interactions with vendors would potentially lead to inventory reductions?
A
Placing a new purchase order with the vendor
B
Negotiating extended payment terms for inventory purchases
C
Returning defective goods to the vendor
D
Receiving additional inventory on consignment
Verified step by step guidance1
Understand the context of inventory reductions: Inventory reductions occur when the quantity of goods held by a company decreases due to specific actions or events.
Analyze each option provided in the problem: Evaluate how each interaction with vendors impacts inventory levels.
Option 1: Placing a new purchase order with the vendor increases inventory levels, as new goods are ordered and will be added to inventory upon receipt.
Option 2: Negotiating extended payment terms for inventory purchases does not directly affect inventory levels; it only changes the payment timeline for goods already purchased.
Option 3: Returning defective goods to the vendor reduces inventory levels because the defective goods are removed from the company's inventory and sent back to the vendor.
Related Videos
Related Practice
