If a difference is found between the physical count and the amount in the perpetual inventory records, an adjusting entry is made to which of the following accounts?
A) Inventory Short and Over
B) Purchases
C) Accounts Payable
D) Accounts Receivable

Question

Quizplus · Accepted Answer

An adjusting entry is made to the Inventory Short and Over account to reflect the difference between the physical count and the perpetual inventory records. This account is used to account for small discrepancies that may exist due to errors in inventory tracking or theft, among other factors. Adjusting the inventory records to reflect these differences helps to ensure that the company's financial statements are accurate and reliable.

If a Difference Is Found Between the Physical Count and the Amount