Inventory consists of the products that a business sells to its customers and the material needed to make those products.

• True

• False

A startup business should initially purchase the minimum quantity of equipment and supplies needed.

• True

• False

Vendors are also called suppliers.

• True

• False

You should always choose the vendor who provides the lowest prices.

• True

• False

Retail, service, and manufacturing businesses must purchase inventory before they can open for business.

• True

• False

For a manufacturing business, inventory is merchandise purchased with the intent of either reselling it or using it to produce the business's finished product.

• True

• False

A startup business should not tie up too much cash in inventory.

• True

• False

Ongoing business usually have a good idea of how much inventory they need to operate.

• True

• False

An estimate of how much you will pay for merchandise is:

• a quantity discount

• the financing terms

• a quote

• a letter of intent

Which of the following types of business does NOT always need inventory before it can open for business?

• service

• manufacturing

• retailing

• wholesaling