Question

Select the correct answer.

Adidea Corp. has a year-end inventory of $85,000. However, the general ledger account shows a debit balance of $95,000. The company must
change the general ledger to reflect the actual inventory. Assuming the company uses a perpetual system, which adjusting worksheet entry does it
need to use?
X A. Inventory (debit) 10,000
Cost of goods sold (credit) 10,000
B. Inventory change (debit) 10,000 Inventory (credit) 10,000
OC. Cost of goods sold (debit) 10,000 Inventory change (credit) 10,000
Inventory (debit) 10,000
Inventory change (credit) 10,000
D.

Answer 1

Answer: B. Inventory change (debit) 10,000 Inventory (credit) 10,000

Step-by-step explanation:

Option B. is the correct adjusting worksheet entry because it correctly reflects the difference between the actual inventory ($85,000) and the inventory recorded in the general ledger ($95,000). The debit entry of $10,000 to "Inventory change" increases the inventory to the correct amount of $85,000, and the credit entry of $10,000 to "Inventory" decreases the recorded inventory in the general ledger to the correct amount of $85,000. This will help to match the actual inventory with the general ledger account.