Financial & Managerial Accounting 17th Edition by Jan Williams ,Susan Haka,Mark Bettner,Joseph Carcello

Exercise 21

Frisbee Hardware uses a perpetual inventory system. At year-end, the Inventory account has a balance of $250,000, but a physical count shows that the merchandise on hand has a cost of only $246,000.
a. Explain the probable reason(s) for this discrepancy.
b. Prepare the journal entry required in this situation.
c. Indicate all the accounting records to which your journal entry in part b should be posted.