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Question
If the physical count of inventory revealed $158,000 of merchandise on hand and the inventory records reported $163,000, what would be the necessary adjusting entry for inventory shrinkage?
a. debit Merchandise Inventory, $158,000; credit Cost of Merchandise Sold, $158,000
b. debit Merchandise Inventory, $5,000; credit Cost of Merchandise Sold, $5,000
c. debit Cost of Merchandise Sold, $163,000; credit Merchandise Inventory, $163,000
d. debit Cost of Merchandise Sold, $5,000; credit Merchandise Inventory, $5,000
Answer
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