Ask Question
12 July, 19:18

A company uses a periodic inventory system and during the December 31, year-end physical inventory count discovered that they have incurred a $300 shrinkage in inventory. Prepare the necessary adjusting entry to record this shrinkage by selecting the account names from the pull-down menus and entering dollar amounts in the debit and credit columns.

+3
Answers (1)
  1. 12 July, 20:57
    0
    Debit: Shrinkage expense $300

    Credit: Inventory $300

    Explanation:

    When your business experiences shrinkage, you must adjust your accounting books. Record inventory losses by increasing your Shrinkage Expense account and decreasing your Inventory account.

    Debit your Shrinkage Expense account and credit your Inventory account.

    To adjust for shrinkage, create a journal entry that looks like this:

    Debit Shrinkage expense account by $300

    Credit Inventory account $300
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “A company uses a periodic inventory system and during the December 31, year-end physical inventory count discovered that they have incurred ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers