The General Ledger Shows a Balance of $65,300 in the Inventory

question 17

Multiple Choice

The general ledger shows a balance of $65,300 in the Inventory account at the end of the period.A physical inventory shows a count of $67,900.The adjusting entry would be a:

• A) debit to Cost of goods sold and a credit to Inventory.
• B) debit to Cost of goods sold and a credit to Cash.
• C) debit to Inventory and a credit to Cost of goods sold.
• D) debit to Inventory and a credit to Cash.

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Definitions:

Input

Resources (such as labor, materials, and capital) used in the production process to create goods or services.

Marginal Resource Cost

The additional cost incurred by a firm for using one more unit of input, like labor or raw materials.

Labor

The effort by workers to produce goods or services, typically measured in terms of hours worked or output produced.

Additional Unit

Refers to the next unit of a product or service to be produced or consumed, considered in analysis of costs and benefits.