The General Ledger Shows a Balance of $67,000 in the Merchandise

Multiple Choice

The general ledger shows a balance of $67,000 in the Merchandise Inventory account at the end of the period.The physical inventory count shows inventory of $64,400.(Assume a perpetual inventory system.) The adjusting entry includes a ________.

A) debit to Cost of Goods Sold and a credit to Merchandise Inventory for $2,600
B) debit to Cost of Goods Sold and a credit to Cash for $2,600
C) debit to Merchandise Inventory and a credit to Cost of Goods Sold for $2,600
D) debit to Merchandise Inventory and a credit to Cash for $2,600