The Merchandise Inventory Account of a Company Shows a Balance $$\begin{array} { | c | r | r | } \hline \text { Cost of Goods Sold } & 9,000 & \\\hline \text { Shrinkage Expense } & & 9,000 \\\hline\end{array}$$

question 45

Multiple Choice

The Merchandise Inventory account of a company shows a balance of $50,000 but a physical count of inventory shows $41,000 Which of the following entries is required to record the shrinkage? (Assume a perpetual inventory system.)

• A) \[\begin{array} { | c | r | r | }
• \hline \text { Cost of Goods Sold } & 9,000 & \\
• \hline \text { Shrinkage Expense } & & 9,000 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | c | r | r | }
• \hline \text { Merchandise Inventory } & 9,000 & \\
• \hline \text { Cost of Goods Sold } & & 9,000 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | l | r | r | }
• \hline \text { Cost of Goods Sold } & 9,000 & \\
• \hline \text { Merchandise Inventory } & & 9,000 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | l | r | r | }
• \hline \text { Cash } & 9,000 & \\
• \hline \text { Merchandise Inventory } & & 9,000 \\
• \hline
• \end{array}\]

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Definitions:

Ethical Conduct

Behavior that aligns with accepted principles of right and wrong governing the professional practice or conduct of an individual or organization.

Fundamental Rights

The basic human rights and freedoms that are guaranteed to all individuals, often protected by law or constitution, such as the right to free speech, equality, and liberty.

Wealth Redistribution

The transfer of income, wealth, or property from some individuals to others by means of a social mechanism such as taxation, charity, welfare, land reform, monetary policies, confiscation, divorce or tort law.

Utilitarianism

Utilitarianism is an ethical theory that proposes that the best action is the one that maximizes utility, usually defined as that which produces the greatest well-being of the greatest number of people.