Uptown Department Store Uses the Perpetual Inventory System and Has

question 48

Multiple Choice

Uptown Department Store uses the perpetual inventory system and has ending inventory with a historical cost of $620,000. The current replacement cost of the inventory is $598,000. The net realizable value is $670,000. Before any adjustments at the end of the period, the cost of goods sold account has a balance of $920,000. Which journal entry is required under U.S. GAAP?

• A)debit Cost of Goods Sold for $50,000 and credit Inventory for $50,000
• B)debit Inventory for $50,000 and credit Cost of Goods Sold for $50,000
• C)debit Cost of Goods Sold for $22,000 and credit Inventory for $22,000
• D)debit Inventory for $22,000 and credit Cost of Goods Sold for $22,000

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Definitions:

Vestibule

An entrance hall or other open area in a building used by the public, especially a hotel or theater.

Acoustic

Pertaining to sound or the sense of hearing.

Decibel

A unit of measurement used to express the intensity of sound or the power level of an electrical signal by comparing it with a given level on a logarithmic scale.

Myringotomy

A surgical procedure to create an opening in the eardrum to drain fluid or relieve pressure.