Tower Junction has Cost of Goods Sold of $100,000 before adjusting entries. The physical count of inventory indicates that the actual inventory amount is $1,000 greater than the balance in the Inventory account. When Tower Junction prepares closing entries, they will

Question

Quizplus · Accepted Answer

The physical count shows $1,000 more inventory than recorded, indicating an overstatement of COGS. To correct this, COGS should be reduced by $1,000, resulting in a credit to COGS for $99,000.

Tower Junction Has Cost of Goods Sold of $100,000 Before