Jayson Products Uses a Perpetual Inventory System

question 27

Multiple Choice

Jayson Products uses a perpetual inventory system. At year-end, the Inventory account had a balance of $280,000, but a complete year-end physical inventory indicated goods on hand costing only $273,000. Jayson should:

• A) Reduce its cost of goods sold by $7,000.
• B) Record a $7,000 current liability.
• C) Reduce the balance in its Inventory controlling account and inventory subsidiary ledger by $7,000.
• D) Reduce the balance in the Inventory controlling account and record a current liability, both in the amount of $7,000.

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Definitions:

Random Activity

An action or series of actions taken without a specific plan, pattern, or purpose, often leading to unpredictable outcomes.

Sales-oriented

A business approach that prioritizes selling products and services as its primary objective, often focusing on high sales volume and short-term outcomes.

Great Depression

Refers to a severe worldwide economic downturn that took place during the 1930s, marked by widespread unemployment and financial hardship.

Marketing Mix

A model consisting of the four Ps (Product, Price, Place, Promotion) used to consider the key elements in marketing strategies and activities.