Under a Perpetual Inventory System, a Shortage in Inventory Requires

Multiple Choice

Under a perpetual inventory system, a shortage in inventory requires an adjusting entry that

A) debits Cost of Goods Sold and credits Accounts Payable.
B) debits Merchandise Inventory and credits Cost of Goods Sold.
C) debits Cost of Goods Sold and credits Merchandise Inventory.
D) debits Accounts Payable and credits Merchandise Inventory.
E) debits Accounts Payable and credits Cost of Goods Sold.