Deal of The Day! Hurry Up, Grab the Special Discount - Save 25% - Ends In 00:00:00 Coupon code: SAVE25
Welcome to Pass4Success

- Free Preparation Discussions
Mail Us support@pass4success.com
Location US
Mob_nav_barsMENU

AICPA Exam CPA-Business Topic 1 Question 100 Discussion

Actual exam question for AICPA's CPA-Business exam
Question #: 100
Topic #: 1
[All CPA-Business Questions]

Which of the following actions is the acknowledged preventive measure for a period of deflation?

Show Suggested Answer Hide Answer
Suggested Answer: A

Choice 'a' is correct. As the cost of carrying inventory decreases, safety stock would tend to increase to reduce the risk of stock outs.

Choice 'b' is incorrect. As sales become more predictable (sales variability decreases), less (not more) safety stock would be needed because the risk of stock outs would have decreased.

Choice 'c' is incorrect. If the cost of stock outs decrease, safety stock would decrease.

Choice 'd' is incorrect. If lead-time decreases, safety stock would decrease.


by Kristeen at Sep 18, 2024, 07:39 PM

Limited Time Offer

25%

Off

Get Premium CPA-Business Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel
Lai
3 months ago
I've got a better idea - how about we just print more money and call it a day? What could go wrong?
upvoted 0 times
Noble
2 months ago
C) Decreasing interest rates.
upvoted 0 times
...
Ashley
2 months ago
B) Increasing the money supply.
upvoted 0 times
...
Noe
2 months ago
A) Increasing interest rates.
upvoted 0 times
...
...
Celeste
3 months ago
Increasing interest rates during deflation? That's like trying to put out a fire with gasoline!
upvoted 0 times
Sabrina
1 months ago
D) Decreasing the money supply.
upvoted 0 times
...
Jose
1 months ago
C) Decreasing interest rates.
upvoted 0 times
...
Sue
1 months ago
B) Increasing the money supply.
upvoted 0 times
...
Eugene
1 months ago
A) Increasing interest rates.
upvoted 0 times
...
...
Monroe
3 months ago
Wait, isn't decreasing the money supply the way to combat inflation? I'm so confused!
upvoted 0 times
Clorinda
2 months ago
B) Increasing the money supply.
upvoted 0 times
...
Irma
2 months ago
A) Increasing interest rates.
upvoted 0 times
...
...
Desmond
3 months ago
But wouldn't increasing interest rates discourage borrowing and spending, leading to deflation?
upvoted 0 times
...
Nan
3 months ago
I disagree, I believe the answer is B) Increasing the money supply.
upvoted 0 times
...
Beckie
3 months ago
Increasing the money supply? Sounds like the right move to me. I'll have to remember that one.
upvoted 0 times
Lai
2 months ago
No problem! It's important to understand the measures to prevent deflation.
upvoted 0 times
...
Raina
2 months ago
Oh, I see. Thanks for the clarification.
upvoted 0 times
...
Derrick
2 months ago
The correct action is increasing interest rates.
upvoted 0 times
...
Mi
3 months ago
Increasing the money supply is actually not the acknowledged preventive measure for deflation.
upvoted 0 times
...
...
Desmond
3 months ago
I think the answer is A) Increasing interest rates.
upvoted 0 times
...
Lizbeth
3 months ago
Hmm, I thought decreasing interest rates was the way to go during deflation. I hope I don't get this one wrong on the exam!
upvoted 0 times
...

Save Cancel