Which of the Following Is True About Firms Using a Just-In-Time

question 108

Multiple Choice

Which of the following is true about firms using a just-in-time (JIT) inventory system?

• A)A company is more likely to have excess unsold inventory that it has to write off against earnings.
• B)Parts enter the manufacturing process immediately; they are not warehoused.
• C)It is difficult to spot and fix defective inputs.
• D)The amount of working capital a company needs to finance inventory increases.
• E)A firm has ample buffer stock of inventory.

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Definitions:

Building Account

An account used to track the costs associated with the construction or improvement of a building until the project is completed and the asset is ready for use.

Adjusted Trial Balances

An internal document that lists all accounts and their balances after adjustments are made for errors, accruals, and deferrals, used for preparing financial statements.

Adjusting Entries

Financial records made upon the completion of an accounting cycle to allocate gains and deductions to the actual period in which they occurred.

Insurance Expired

Indicates the end of an insurance policy's coverage period.