Question

The inventory records of Global Company indicate that $77,600 of merchandise should be on hand at the end of the month. The physical inventory indicates that $74,000 is actually on hand. The journal entry to adjust inventory shrinkage will include a.a credit to Cost of Merchandise Sold. b.a debit to Merchandise Inventory. c.a debit to Cost of Merchandise Sold. d.None of these choices are correct.

Answer 1

The journal entry to adjust inventory shrinkage will include c. a debit to Cost of Merchandise Sold.

What is inventory shrinkage?

Inventory shrinkage is a situation whereby the value of ending inventory as per the accounting records exceeds the physical inventory count.

Inventory shrinkage may be caused by:

• Clerical errors
• Damage to goods
• Loss
• Theft.

Thus, the journal entry to adjust inventory shrinkage will include c. a debit to Cost of Merchandise Sold.

Learn more about adjusting inventory shrinkage at https://brainly.com/question/6233622

#SPJ12