Answer to Question #194820 in Accounting for zohaib

Question

costello corporation uses a perpetual inventory system. at the end of the year, the inventory balance reported by its system is $45,270. costello performs an inventory count and determines that the actual ending inventory is $39,780. discuss why a company that uses a perpetual inventory system would still go to the trouble to perform a physical inventory count. why might the ending balance differ between the perpetual inventory system and physical inventory count? assume that costello determines that the difference between the perpetual records and the physical count is due to an accident that occurred during the year. what journal entry should costello make? assume that costello believes the difference between the perpetual records and the physical count is due to errors made by the company’s accounting staff. on occasion, the staff fail to transfer inventory to cost of goods sold when a sale were made. what journal entry should costello make in this case?

Answer 1

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