Author Question: Accrual accounting is an accounting system in which ________. A) measurement of income is NOT ... (Read 124 times)

wrbasek0 · **on:** Jul 5, 2018

Accrual accounting is an accounting system in which ________.

A) measurement of income is NOT based on cash receipts and cash disbursements
B) measurement of income is based on cash receipts and cash disbursements
C) all businesses prepare reports required by the FASB
D) there are no timing differences

Question 2

If the physical count of the inventory revealed 158,000 of merchandise on hand and the inventory records reported 163,000, what would be the necessary adjusting entry to record inventory shrinkage?
a. debit Merchandise Inventory, 158,000; credit Cost of Merchandise Sold, 158,000
b. debit Merchandise Inventory, 5,000; credit Cost of Merchandise Sold, 5,000
c. debit Cost of Merchandise Sold, 163,000; credit Merchandise Inventory, 158,000
d. debit Cost of Merchandise Sold, 5,000; credit Merchandise Inventory, 5,000