Question

How long is MEMO inventory documentation retained?

A) 1 Year
B) 3 Years
C) 5 Years
D) 7 Years

Answer 1

MEMO inventory documentation is typically retained for at least 7 years, as this timeframe satisfies the statute of limitations for tax audits and claims according to U.S. GAAP and IRS guidelines. Companies may retain records longer based on their policies and legal requirements.

Step-by-step explanation:

The length of time that MEMO inventory documentation is retained depends on the company's internal policies and the regulatory requirements of the jurisdiction in which the company operates. In the context of generally accepted accounting principles (GAAP) and the Internal Revenue Service (IRS) guidelines in the United States, important financial records such as inventory documents are commonly retained for a minimum of 7 years. This period is chosen as it covers the statute of limitations for tax audits and potential claims. However, businesses may decide to keep records for longer periods depending on their own risk management strategies and other legal obligations.