Under the perpetual inventory system, a physical count shows a $90.00 overage. How would the overage be entered into the journal and how would it be stated on the income statement?
a. Cost of Goods Sold would be debited $90.00 and Merchandise Inventory would be credited $90.00 with no effect of the overage being reported on the income statement.
b. Inventory Short and Over would be debited $90.00 and Merchandise Inventory would be credited $90.00 and the overage would reported as an expense on the income statement.
c. Merchandise Inventory would be debited $90.00 and Sales would be credited $90.00 with the revenue being reported on the income statement.
d. Merchandise Inventory would be debited $90.00 and Inventory Short and Over would be credited $90.00 and the overage would be reported as other revenue on the income statement.
e. Cash would be debited $90.00 and Accounts Receivable would be credited $90.00 and the overage would be reported as an expense on the income statement.
d
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