A Company's Ledger Shows an Inventory Balance of $20,000 and a Physical

question 31

Multiple Choice

A company's ledger shows an Inventory balance of $20,000 and a physical count of the inventory shows $19,000. Which of the following entries is needed to record the shrinkage?

• A) \(\begin{array} { | r | r | r | }
• \hline \text { Cost of goods sold } & 1,000 & \\
• \hline \text { Shrinkage expense } & & 1,000 \\
• \hline
• \end{array}\)
• B) \(\begin{array} { | r | r | r | }
• \hline \text { Inventory } & 1,000 & \\
• \hline \text { Cost of goods sold } & & 1,000 \\
• \hline
• \end{array}\)
• C) \(\begin{array} { | c | r | r | }
• \hline \text { Cost of goods sold } & 1,000 & \\
• \hline \text { Inventory } & & 1,000 \\
• \hline
• \end{array}\)
• D) \(\begin{array} { | c | r | r | }
• \hline \text { Cash } & 1,000 & \\
• \hline \text { Inventory } & & 1,000 \\
• \hline
• \end{array}\)

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Definitions:

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