Question

The Bona Fide Needs Rule permits obligation in one fiscal year and delivery in a subsequent fiscal year if production lead-time of the material requires obligation in one fiscal year for the material to be available for installation in a later fiscal year. The time between ordering and delivery should not be excessive. Exception is shelf can store up to 90 days if you have the storage space.

a) True
b) False

Answer 1

The Bona Fide Needs Rule permits obligation in one fiscal year and delivery in a subsequent fiscal year if production lead-time of the material requires obligation in one fiscal year for the material to be available for installation in a later fiscal year. The time between ordering and delivery should not be excessive.

Step-by-step explanation:

The Bona Fide Needs Rule permits obligation in one fiscal year and delivery in a subsequent fiscal year if production lead-time of the material requires obligation in one fiscal year for the material to be available for installation in a later fiscal year. However, the time between ordering and delivery should not be excessive. An exception to this is that shelf can store up to 90 days if you have the storage space.