Asked by Shanda Harrison on Jun 29, 2024
Verified
Zenith Company's Merchandise Inventory account at year-end has a balance of $91,820,but a physical count reveals that only $90,450 of inventory exists.The adjusting entry to record this $1,370 of inventory shrinkage is:
A)
B)
C)
D)
E)
Merchandise Inventory
Goods a company has in stock and available for sale, typically in a retail or wholesale setting.
Inventory Shrinkage
The loss of products between purchase and sale, often due to theft, damage, or errors in counting.
Physical Count
The process of counting the actual number of items in inventory, typically to verify accounting records or when preparing financial statements.
- Understand the effects of inventory transactions on financial reports.
- Understand the concept of inventory shrinkage and how to account for it.
Verified Answer
Cost of Goods Sold 1,370
Merchandise Inventory 1,370
The correct option is C.
Learning Objectives
- Understand the effects of inventory transactions on financial reports.
- Understand the concept of inventory shrinkage and how to account for it.
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