Gruver Company Maintains Perpetual Inventory Records

question 71

Multiple Choice

Gruver Company maintains perpetual inventory records.The company's inventory account had a $5,500 balance as of December 31,2012.On that date,a physical count of inventory showed only $5,300 of merchandise in stock.The write-down to recognize the missing inventory will

• A) decrease assets.
• B) increase expense.
• C) decrease equity.
• D) all of these.

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Definitions:

Regulation A

Regulation A is an exemption from the registration requirements mandated by the Securities Act, allowing smaller companies to raise capital through a simplified public offering process.

Qualification of Investors

The criteria that determine whether an individual or entity is eligible to invest in certain securities or investments.

Strict Liability

A legal doctrine holding an individual or entity responsible for damages or harm caused by their actions, regardless of negligence or intent.

Registration Statement

A document submitted to the Securities and Exchange Commission (SEC) containing details about a company's financial status and operational plans, for approval to sell securities to the public.