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Zenith Company's Merchandise Inventory account at year-end has a balance of $91,820, but a physical count reveals that only $90,450 of inventory exists. The adjusting entry to record this $1,370 of inventory shrinkage is: Multiple Choice

Sagot :

Answer:

Cost of goods sold $1,370

Merchandise Inventory  $1,370

Explanation:

The cost of goods sold will be debited and merchandise inventory will be credited for the amount of $1,370 ($91,820 - $90,450). Shrinkage expenses is included in the cost of goods sold account.

Journal entry

Journal Entry Debit Credit

Cost of goods sold $1,370

Merchandise Inventory  $1,370

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