After performing a physical count of inventory at the end of the accounting period,it was discovered that the amount of inventory on hand was less than the accounting records reported.The entry to record this inventory shrinkage includes:
A)credit to Cost of Goods Sold.
B)debit to Inventory.
C)credit to Purchase Discounts.
D)credit to Inventory.

Question

Quizplus · Accepted Answer

The entry to record shrinkage includes a debit to Cost of Goods Sold (to increase this expense account)and credit Inventory (to decrease this asset account).

After Performing a Physical Count of Inventory at the End