Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

5. Inventory

Inventory Errors

Financial Accounting

5. Inventory

Inventory Errors

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Multiple Choice

To reduce the cost of holding too much inventory, many companies have implemented which of the following inventory management systems?

Specific identification method

Periodic inventory system

Weighted average cost method

Just-in-Time (JIT) inventory system

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Verified step by step guidance

Understand the concept of inventory management systems: Inventory management systems are methods used by companies to control and optimize the storage, ordering, and usage of inventory to reduce costs and improve efficiency.

Learn about the Just-in-Time (JIT) inventory system: JIT is a strategy where companies maintain minimal inventory levels and receive goods only as they are needed for production or sales. This reduces holding costs and minimizes waste.

Compare JIT with other inventory methods: Specific identification, periodic inventory system, and weighted average cost method are accounting methods for tracking inventory costs, but they do not directly address reducing inventory holding costs like JIT does.

Recognize the purpose of JIT: The primary goal of JIT is to align inventory levels closely with actual demand, ensuring that companies do not overstock or understock, which can lead to cost inefficiencies.

Apply the concept: When asked about inventory management systems aimed at reducing holding costs, identify JIT as the correct answer because it focuses on minimizing inventory levels and associated costs.