Mary Monitor CPA noted that ABC Co. Ltd. received goods prior to year-end and included them in the physical inventory but did not record them in the accounting records. In this case, which of the following adjustments should be made?

Question

Quizplus · Accepted Answer

Since the goods were received prior to year-end and included in the physical inventory, they should be added to inventory by debiting inventory and crediting accounts payable. This adjustment ensures that the ending inventory balance is accurately reflected on the balance sheet, and accounts payable is reduced by the amount owed for the goods.

Mary Monitor CPA Noted That ABC Co