If the inventory shows an actual count of $450 and the perpetual inventory according to the records shows $410, the adjusting entry for the $40 would:
A)debit Cost of Goods Sold; debit Purchase Returns and Allowances.
B)debit Cost of Goods Sold; credit Inventory.
C)debit Inventory; credit Cost of Goods Sold.
D)debit Inventory; credit Purchase Returns and Allowances.

Question

Quizplus · Accepted Answer

The correct adjusting entry to reconcile the discrepancy between the actual inventory count and the perpetual inventory records involves debiting Inventory to increase it to the actual count ($450) and crediting Cost of Goods Sold to decrease it, thereby adjusting the expense to reflect the actual cost of inventory on hand.

If the Inventory Shows an Actual Count of $450 and the Perpetual