A Company Uses the Perpetual Inventory System

question 59

Multiple Choice

A company uses the perpetual inventory system.At year end the general ledger indicated that this company had a balance of $50,000 in the Inventory account.Actual inventory on hand per a physical count was $51,500.What action does the company now need to take?

• A)No action is needed;the difference between the ledger and actual is less than 5%.
• B)The company needs to debit Cost of Goods Sold and credit Inventory,$1,500.
• C)The company needs to debit Inventory and credit Cost of Goods Sold for $1,500.
• D)The company should debit the Purchases account and credit Cost of Goods Sold.

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Definitions:

Cross-Departmental Processes

Activities and workflows that involve collaboration and interaction between different departments or units within an organization.

Cloud-Based ERP

Enterprise Resource Planning systems that are hosted on a vendor's cloud platform rather than an organization’s own servers, facilitating access from anywhere via the Internet.

ERP System

Enterprise Resource Planning System, a suite of integrated applications that an organization uses to manage core business processes.

Types of Reports

Various categories of documents that present and analyze information, including statistical, research, and progress reports.