Question: When using a perpetual inventory system, the adjusting entry required when merchandise inventory records do not agree with the physical count requires reporting a loss

When using a perpetual inventory system, the adjusting entry required when merchandise inventory records do not agree with the physical count

requires reporting a loss when actual is higher than records.

has an effect on cost of goods sold.

has no effect on cost of goods sold.

requires reporting a gain when actual is lower than records.

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