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 sales (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 sales (expense) 
CR Inventory (asset);
D)
DR Provision for Inventory losses (liability) 
CR Inventory (asset).

Quizplus · Accepted Answer

The correct journal entry to recognize inventory items that have been lost involves debiting an expense account (Inventory losses) and crediting the Inventory account to reflect the decrease in assets.

Which of the Following Is an Appropriate Journal Entry to Recognise