Question

suppose dave's discount merchandise inventory account showed a balance of 8000 before the year end adjustments. The physical count of goods on hand totaled 7400. Dave uses a perpetual inventory system. To adjust the accounts, which entry would the company make

Answer 1

Answer:

Cost of goods sold DR 600

Merchandise inventory CR 600

Explanation:

A perpetual inventory system is a method of inventory management that is used in order to records real-time transactions of received or sold stock. In this system, based on the information provided the company would make the following entry

Cost of goods sold DR 600

Merchandise inventory CR 600

This is because there is a difference on physical goods on hand of 600, meaning that they sold that amount throughout the year. Which is made as a Cost of Goods Sold entry. The company also needs to enter the amount of goods that have been acquired by a distributor, wholesaler, or retailer from suppliers which would be the same.