The general ledger shows a balance of $23,678 in the Inventory account at the end of the period.A physical inventory shows a count of $22,078.The adjusting entry would be a:
A) debit to Cost of goods sold and a credit to Cash.
B) debit to Inventory and a credit to Cash.
C) debit to Cost of goods sold and a credit to Inventory.
D) debit to Inventory and a credit to Cost of goods sold.

Question

Quizplus · Accepted Answer

The correct adjusting entry to reconcile the physical inventory count with the general ledger is a debit to Cost of Goods Sold and a credit to Inventory. This entry decreases the Inventory account to match the physical count and increases the Cost of Goods Sold to reflect the cost of inventory that has been used or lost.

The General Ledger Shows a Balance of $23,678 in the Inventory