Ming Limited had the following items of inventories at reporting date.

What is the adjustment necessary at reporting date?
A) DR Inventories $50
B) DR Inventories $100
C) CR Inventories $50
D) CR Inventories $0

Question

Ming Limited had the following items of inventories at reporting date.

What is the adjustment necessary at reporting date?
A) DR Inventories $50 
B) DR Inventories $100 
C) CR Inventories $50 
D) CR Inventories $0

Quizplus · Accepted Answer

The adjustment necessary at reporting date is to decrease the inventories by $50, as 4 units worth $200 were sold but not yet recorded in the accounting records. Therefore, the correct entry would be CR Inventories $50. Option A and B both increase the inventories, which is incorrect. Option D doesn't account for the sale and therefore is also incorrect.

Ming Limited Had the Following Items of Inventories at Reporting