If the Physical Count of the Inventory Revealed $72,000 of Merchandise

question 142

Multiple Choice

If the physical count of the inventory revealed $72,000 of merchandise on hand and the inventory records reported $73,200, what would be the necessary adjusting entry to record inventory shortage?

• A) Merchandise inventory debit $72,000; Cost of Merchandise Sold credit $72,000.
• B) Merchandise inventory debit $1,200; Cost of Merchandise Sold credit $1,200.
• C) Cost of Merchandise Sold debit $73,200; Merchandise Inventory credit $72,000.
• D) Cost of Merchandise Sold debit $1,200; Merchandise Inventory credit $1,200.

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Definitions:

Jay's Treaty

A 1794 agreement between the United States and Great Britain that sought to resolve outstanding issues from the Treaty of Paris (1783) and facilitated ten years of peaceful trade between the two nations.

Bank of the United States

A central bank chartered by the United States Congress at two different periods, the first from 1791 to 1811 and the second from 1816 to 1836, to handle the government's transactions.

Edmond-Charles Genet

A French diplomat who served as the French minister to the United States during the French Revolution, known for his efforts to enlist American support for France’s wars against European monarchies.

French Diplomat

An official representing France in matters of international relations, responsible for negotiating and maintaining France's interests abroad.