Using a perpetual inventory system, if Sackville Harness Shop accounting records show an ending inventory balance of $43,000 and a physical count shows a balance of $45,000, it is necessary to
A) debit your inventory records to adjust to actual.
B) purchase additional inventory.
C) credit sales.
D) credit Purchase Returns and Allowances.

Question

Quizplus · Accepted Answer

The discrepancy between the accounting records and the physical count indicates that the inventory records are understated by $2,000. To adjust the records to match the actual physical inventory, you would debit (increase) your inventory account to reflect the additional $2,000 found during the physical count.

Using a Perpetual Inventory System, If Sackville Harness Shop Accounting