Multiple Choice
Which of the following is NOT addressed by a business continuity plan?
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1. Introduction to Accounting
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Which of the following inventory items warrants the use of a single-period inventory model?
A
Fresh newspapers sold at a newsstand
B
Canned soup in a grocery store
C
Automobile spare parts in a dealership
D
Office supplies in a corporate office
Verified step by step guidance1
Understand the concept of a single-period inventory model: This model is used for items that have a limited selling period or perish quickly, making it impractical to carry over unsold inventory to the next period.
Analyze the characteristics of each inventory item: Fresh newspapers have a very short shelf life and lose their value quickly after the day they are published, making them suitable for a single-period inventory model.
Compare the other options: Canned soup, automobile spare parts, and office supplies do not have a limited selling period. These items can be stored and sold over time without losing their value significantly.
Determine the key factor: The single-period inventory model is most appropriate for items with a high risk of obsolescence or perishability within a short time frame.
Conclude that fresh newspapers sold at a newsstand warrant the use of a single-period inventory model due to their time-sensitive nature.
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