If the physical count of the inventory revealed $158,000 of merchandise on hand and the inventory records reported $163,000, what would be the necessary adjusting entry to record inventory shortage?
A) Merchandise inventory debit $158,000; Cost of Merchandise Sold credit $158,000.
B) Merchandise inventory debit $5,000; Cost of Merchandise Sold credit $5,000.
C) Cost of Merchandise Sold debit $163,000; Merchandise Inventory credit $158,000.
D) Cost of Merchandise Sold debit $5,000; Merchandise Inventory credit $5,000.
Correct Answer:
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