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

Question

Quizplus · Accepted Answer

Since the purchase was not recorded in the accounting records, the cost of goods sold should be adjusted by recording the expense and reducing the liability to the supplier. Therefore, we should debit Cost of Goods Sold and credit Accounts Payable.

Mary Monitor CPA Noted That ABC Co