The _______________ classification system classifies inventory according to its dollar value to the firm.
A)periodic
B)continuous
C)ABC
D)EOQ

Question

Quizplus · Accepted Answer

The ABC classification system is a method of categorizing inventory based on its value to the company. This is done by dividing inventory into three categories: A, B, and C. Category A items are high-value items that make up a small percentage of total inventory but account for a large percentage of total inventory value. Category C items are low-value items that make up a large percentage of total inventory but account for a small percentage of total inventory value. Category B items fall somewhere in the middle. This system helps companies focus their attention on the most valuable inventory items and ensure that they are properly managed and controlled.

The _______________ Classification System Classifies Inventory According to Its Dollar