As a result of taking an annual physical inventory,it usually is necessary in a perpetual inventory system to make an entry:
A)Reducing assets and increasing the cost of goods sold.
B)Reducing assets and increasing liabilities.
C)Reducing the cost of goods sold.
D)Increasing assets and increasing the cost of goods sold.

Question

Quizplus · Accepted Answer

When taking an annual physical inventory in a perpetual inventory system, any discrepancies between the physical count and the recorded inventory must be adjusted for. This typically involves reducing the assets on the balance sheet and increasing the cost of goods sold by the amount of the adjustment, since the missing or misplaced inventory was likely sold and will therefore reduce the company's gross profit.

As a Result of Taking an Annual Physical Inventory,it Usually