Asked by
Mariam Bhutto
on Nov 12, 2024
Verified
If the physical count of inventory revealed $158,000 of merchandise on hand and the inventory records reported $163,000, what would be the necessary adjusting entry to record inventory shrinkage?
A) debit Merchandise Inventory, $158,000; credit Cost of Merchandise Sold, $158,000
B) debit Merchandise Inventory, $5,000; credit Cost of Merchandise Sold, $5,000
C) debit Cost of Merchandise Sold, $163,000; credit Merchandise Inventory, $158,000
D) debit Cost of Merchandise Sold, $5,000; credit Merchandise Inventory, $5,000
Inventory Records
Documented information about the quantity, type, and location of inventory a business has on hand or in transit.
Inventory Shrinkage
The loss of inventory that occurs due to theft, damage, or errors in counting or documentation.
Adjusting Entry
An accounting entry made into a company's general ledger at the end of an accounting period to allocate income and expenditure to the period in which they actually occurred.
- Comprehend the crucial elements and significance of inventory management.
Verified Answer
KL
Learning Objectives
- Comprehend the crucial elements and significance of inventory management.