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

question 13

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

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Definitions:

All-You-Can-Eat

A service model usually found in restaurants where customers pay a fixed price and can consume as much food as they desire.

Equity Market

A marketplace where shares of publicly held companies are issued and traded, either through exchanges or over-the-counter markets.

Bond Market

A financial market where participants can issue new debt, known as the primary market, or buy and sell debt securities, known as the secondary market.

Appropriate Mix

The optimal combination or proportion of various elements to achieve a specific goal, often used in the context of investment portfolios.