If beginning inventory is $12,000 and ending inventory is $9,000, the first step in the adjusting process is to credit Merchandise Inventory for $9,000.

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Quizplus · Accepted Answer

The first step in the adjusting process for inventory is to perform a physical count to determine the actual ending inventory. Once the ending inventory is determined, the next step is to compare it with the beginning inventory and make any necessary adjustments. In this case, since the ending inventory is lower than the beginning inventory, a debit entry would be made to the Merchandise Inventory account for the amount of the adjustment, which is $3,000 ($12,000 - $9,000).

If Beginning Inventory Is $12,000 and Ending Inventory Is $9,000