Which of the following is an appropriate journal entry to recognise inventory items that have been lost?
A)
DR Inventory(asset)
CR Provision for inventory losses (liability);
B)
DR Inventory losses (expense)
CR Inventory (asset);
C)
DR Cost of Goods Sold (expense) CR Inventory (asset);
D)
DR Provision for Inventory losses (liability) CR Inventory (asset).

Question

Which of the following is an appropriate journal entry to recognise inventory items that have been lost?
A) 
DR Inventory(asset)
CR Provision for inventory losses (liability);
B) 
DR Inventory losses (expense)
CR Inventory (asset);
C) 
DR Cost of Goods Sold (expense) CR Inventory (asset);
D) 
DR Provision for Inventory losses (liability) CR Inventory (asset).

Quizplus · Accepted Answer

When inventory is lost, it is recognized as an expense (inventory losses) and the asset (inventory) is reduced.

Which of the Following Is an Appropriate Journal Entry to Recognise