A merchandising company using a perpetual inventory system will usually need to make an adjusting entry to ensure that the recorded inventory agrees with physical inventory count.

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A perpetual inventory system keeps a running total of inventory on hand, but adjustments may need to be made when actual inventory counts do not match recorded inventory balances. This is typically done through an adjusting entry to ensure the recorded inventory reflects the physical inventory on hand.

A Merchandising Company Using a Perpetual Inventory System Will Usually