The General Ledger Shows a Balance of $23,678 in the Inventory

question 51

Multiple Choice

The general ledger shows a balance of $23,678 in the Inventory account at the end of the period.A physical inventory shows a count of $22,078.The adjusting entry would be a:

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

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Definitions:

Open Market Purchases

Transactions by a central bank in which it buys securities from the market to increase the money supply and encourage economic activity.

Open Market Sales

The selling of government bonds and securities in the open market to control the money supply and influence interest rates.

Relative Price

The price of one good or service compared to the price of another, essentially showing the trade-off between the two items.

Menu Costs

Menu costs refer to the expenses incurred by firms in changing prices in response to market changes, including the physical costs of changing price tags and the costs of updating marketing materials.