Ashton Company Uses the Perpetual Inventory System

question 112

Multiple Choice

Ashton Company uses the perpetual inventory system.The company's inventory account had a $6,600 balance as of December 31,Year 1.A physical count of inventory shows only $5,900 of merchandise in stock at December 31,Year 1.How will the entry to recognize the missing inventory affect the company's financial statements?

• A)Increase assets.
• B)Increase expense.
• C)Decrease cash flow from operating activities.
• D)All of these answer choices are correct.

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Definitions:

Perceptual Selection

The process by which individuals filter and selectively focus on certain stimuli in the environment while ignoring others, based on personal interests, background, and psychological factors.

Expatriate Failure

The situation when an expatriate, or an individual working outside their native country, is unable to adapt to the foreign environment, leading to poor performance or early return.

Technical Competence

The ability and skills a person possesses to perform a specific technical task or job.

Implicit Personality Effect

The phenomenon where observers form perceptions of others' personalities based on minimal information, often leading to biased judgments.