a. The reason why an actual physical count is likely to indicate a smaller inventory than...

 

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a. The reason why an actual physical count is likely to indicate a smaller inventory than does the perpetual inventory records is inventory shrinkage-the normal loss of inventory through theft, breakage, and spoilage. b. Cost of Goods Sold Inventory To reduce inventory to the quantities reflected in the year-end physical count. 4,000 4,000 c. Both portions of the preceding entry should be posted to the general ledger. In addition, the reduction in inventory should be posted to the inventory subsidiary ledger accounts in which the shortages were determined to exist. a. The reason why an actual physical count is likely to indicate a smaller inventory than does the perpetual inventory records is inventory shrinkage-the normal loss of inventory through theft, breakage, and spoilage. b. Cost of Goods Sold Inventory To reduce inventory to the quantities reflected in the year-end physical count. 4,000 4,000 c. Both portions of the preceding entry should be posted to the general ledger. In addition, the reduction in inventory should be posted to the inventory subsidiary ledger accounts in which the shortages were determined to exist.

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