How Are Defective Products Identified in a JIT Inventory System

question 22

Multiple Choice

How are defective products identified in a JIT inventory system?

• A)Defective inventory is stacked in a particular location.
• B)Defective inventory is color coded
• C)Defective inventory marked down for consumers
• D)The production line is stopped and only started when the problem causing the defective product is identified.

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Definitions:

Fair Value

The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Parent-Company Extension Method

An accounting approach used in consolidation, where the parent company's financial statements extend to include the subsidiary's transactions and balances.

Goodwill

Goodwill is an intangible asset that arises when a company acquires another business for more than the fair value of its net identifiable assets.

NCI

Non-Controlling Interest, which refers to the equity in a subsidiary not attributable, directly or indirectly, to the parent company.