If the Physical Count of Inventory Revealed $158,000 of Inventory

If the physical count of inventory revealed $158,000 of inventory on hand and the inventory records reported $163,000, what would be the necessary adjusting entry to record inventory shrinkage?

A) debit Inventory, $158,000; credit Cost of Goods Sold, $158,000
B) debit Inventory, $5,000; credit Cost of Goods Sold, $5,000
C) debit Cost of Goods Sold, $163,000; credit Inventory, $158,000
D) debit Cost of Goods Sold, $5,000; credit Inventory, $5,000