Bronx Company's ending inventory (at cost)was greater than the market value of the ending inventory. What adjusting entry is required to account for this difference?
D)No adjusting entry is required.

Question

Quizplus · Accepted Answer

When the ending inventory (at cost) is greater than the market value of the ending inventory, it signifies a decline in the value of inventory. This decline needs to be recognized by making an adjusting entry. The entry should decrease the cost of goods sold and increase the inventory account. Therefore, the entry required is to debit Cost of Goods Sold and credit Inventory account. Option C is the correct choice as it shows the required accounts and debits and credits.

Bronx Company's Ending Inventory (At Cost)was Greater Than the Market