Woods company uses the perpetual inventory system. At year end the general ledger indicated that this company had a balance of $47,000 in the Inventory account. Actual inventory on hand per a physical count was $48,500. What action does the company now need to take?
A) No action is needed; the difference between the ledger and actual is less than 5%.
B) The company needs to debit Cost of Goods Sold and credit Inventory, $1,500.
C) The company needs to debit Inventory and credit Cost of Goods Sold for $1,500.
D) The company should debit the Purchases account and credit Cost of Goods Sold.
C) The company needs to debit Inventory and credit Cost of Goods Sold for $1,500.
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