View Policies Current Attempt in Progress Assuming the company uses the earnings approach for revenue recognition in a perpetual system, if the accounting records show an ending Inventory balance of $21100 and a physical court shows a balance of $20000, it is necessary to debit Cost of Goods Sold and credit Merchandise Inventory for $1100 debit Sales Returns and Allowances and credit Merchandise Inventory for $1100 debit Cost of Goods Sold and credit Sales Returns and Allowances for $1100, debit Merchandise Inventory and credit Cost of Goods Sold for $1100 Save for Later Attempts: 0 of 1 used Submit