A merchandising company using a perpetual system may record an adjusting entry due to an inventory count by

Question

Quizplus · Accepted Answer

When a merchandising company using a perpetual system conducts an inventory count and finds discrepancies, an adjusting entry needs to be made to correct the inventory balance. The adjustment should debit Cost of Goods Sold to reflect the cost of the inventory sold and credit Inventory to reflect the remaining inventory on hand. Therefore, the correct choice is C, debiting Cost of Goods Sold.

A Merchandising Company Using a Perpetual System May Record an Adjusting