Which inventory bookkeeping method automatically reduces the book inventory after completion of activity on a component's upper-level item based on what should have been used as specified on the BOM?

• A. Available inventory
• B. Backhaul
• C. Backflush
• D. Backorder

Answer: (C)

Backflush is the inventory accounting method where, after finishing the upper-level item, the system automatically deducts the quantities of components from inventory based on what the bill of materials specifies. This approach assumes the actual consumption matches the BOM and recorded standard costs, so component usage is “flushed” from stock at the moment the finished item is completed. It simplifies recording in lean/JIT environments by avoiding ongoing tracking of each part during production and then reconciling at finish. The other concepts don’t capture this automatic, BOM-driven reduction of component stock at completion.