When adjusting gross requirements for inventory on hand and scheduled receipts, what is the resulting value called?

• A. Deferred expenses
• B. Net requirements
• C. Gross profit
• D. Accrued revenues

Answer: (B)

Verified step by step guidance

1. Understand the concept of 'gross requirements': These are the total demand for an item, including customer orders and dependent demand from other items.
2. Learn about 'inventory on hand': This refers to the current stock available in the inventory that can be used to meet the gross requirements.
3. Understand 'scheduled receipts': These are the quantities of inventory expected to arrive from suppliers or production within a specific time period.
4. Calculate 'net requirements': Net requirements are determined by subtracting inventory on hand and scheduled receipts from the gross requirements. The formula is: $\mathrm{Net}\mathrm{Requirements}=\mathrm{Gross}\mathrm{Requirements}-\mathrm{Inventory}\mathrm{on}\mathrm{Hand}-\mathrm{Scheduled}\mathrm{Receipts}$
5. Recognize that the term 'net requirements' is the correct answer, as it represents the adjusted value after accounting for inventory on hand and scheduled receipts.