Woods company uses the perpetual inventory system. At year end the general ledger indicated that this company
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Question:
Woods company uses the perpetual inventory system. At year end the general ledger indicated that this company had a balance of $ 50,000 in the Inventory account. Actual inventory on hand per a physical count was $ 50,500. What action does the company now need to take?
A. No action is needed; the difference between the ledger and actual is less than 5%.
B. The company should debit the Purchases account and credit Cost of Goods Sold.
C. The company needs to debit Cost of Goods Sold and credit Inventory, $ 500.
D. The company needs to debit Inventory and credit Cost of Goods Sold for $ 500.
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