A company uses the perpetual inventory system. At year end the general ledger indicated that this company had a balance of $47,000 in the Inventory account. Actual inventory on hand per a physical count was $48,500. What action does the company now need to take?
A) No action is needed; the difference between the ledger and actual is less than 5%.
B) The company needs to debit Cost of Goods Sold and credit Inventory, $1,500.
C) The company needs to debit Inventory and credit Cost of Goods Sold for $1,500.
D) The company should debit the Purchases account and credit Cost of Goods Sold.
Correct Answer:
Verified
Q18: Macy's.com, Walmart.com, and Target.com are examples of
Q19: Most businesses today use the periodic inventory
Q20: The general public usually purchase merchandise from
Q21: TNT Inc. had an inventory balance of
Q22: Woods Company had an inventory balance of
Q24: The purchase of inventory affects both an
Q25: When accounting for a merchandising business, which
Q26: Under the periodic inventory system, the amount
Q27: Bach Co. had an inventory balance of
Q28: Both purchase returns and allowances decrease the
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents