In the header of the item master data record for Item A2222. only the Purchasing Item checkbox is selected. The item category checkboxes for Inventory Item and for Sales Item are unchecked. Why…

Question

Options

• AThey are used in the drop ship process
• BThey are components in an assembly bill of materials
• CThey are office supplies
• DThey are used as consignment items

• A
  12% (7)
• B
  4% (2)
• C
  77% (44)
• D
  7% (4)

Explanation

Office supplies fit perfectly because they are purchased from vendors (Purchasing Item = on) but are immediately expensed upon receipt rather than stocked - so there is no inventory to track (Inventory Item = off) - and they are never resold to customers (Sales Item = off). This "purchase-only, expense-immediately" pattern is the classic signature of a non-stock consumable like pens or paper.

Why the distractors are wrong:

• A (Drop ship): Drop-ship items are sold directly to customers, so Sales Item must be checked - contradicting the setup.
• B (Assembly components): Components need to be received into and consumed from inventory, so Inventory Item must be checked - again contradicting the setup.
• D (Consignment): Consignment involves goods tracked in inventory (whether vendor-owned stock at your warehouse or your goods at a customer site), so Inventory Item would typically be active.

Memory tip: Think of the acronym P.I.S. (Purchasing / Inventory / Sales). Office supplies are P only - you Pay for them and they vanish into daily use. If a second checkbox is on, the item has more complexity (sold, stocked, or both).

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