Jayson Products uses a perpetual inventory system. At year-end, the Inventory account had a balance of $280,000, but a complete year-end physical inventory indicated goods on hand costing only $273,000. Jayson should:
A) Reduce its cost of goods sold by $7,000.
B) Record a $7,000 current liability.
C) Reduce the balance in its Inventory controlling account and inventory subsidiary ledger by $7,000.
D) Reduce the balance in the Inventory controlling account and record a current liability, both in the amount of $7,000.

Question

Quizplus · Accepted Answer

Jayson should adjust the Inventory account to match the physical count, reducing it by $7,000 to reflect the actual inventory on hand.

Jayson Products Uses a Perpetual Inventory System