The Merchandise Inventory account balance is $50,000.An physical count of inventory reveals that actual inventory balance is $42,000.Which of the following would be included in the adjusting entry? (Assume a perpetual inventory system. )
A)a $42,000 credit to Merchandise Inventory
B)a $50,000 debit to Cost of Goods Sold
C)a $8,000 credit to Cost of Goods Sold
D)a $8,000 credit to Merchandise Inventory

Question

Quizplus · Accepted Answer

In a perpetual inventory system, the Merchandise Inventory account is adjusted to match the physical count. Since the physical count is $42,000 and the account balance is $50,000, an $8,000 credit to Merchandise Inventory is needed to decrease the account balance to the actual count.

The Merchandise Inventory Account Balance Is $50,000