S1: ABC analysis is a technique of inventory control. S2: In ABC analysis, 'A' items represent high value and low quantity. Which statement(s) is/are correct? MCQ with Answer and Explanation

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S1: ABC analysis is a technique of inventory control. S2: In ABC analysis, 'A' items represent high value and low quantity. Which statement(s) is/are correct?

A. S1 only

B. S2 only

C. Both S1 and S2

D. Neither S1 nor S2

Answer: Option C

Solution (By JKExamLibrary)

ABC analysis classifies inventory based on usage value. 'A' items are the most valuable, typically representing a small percentage of total quantity but a large percentage of total inventory cost. Both statements are correct.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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