Adjusting and Closing Entries in a Perpetual Inventory System:

After a physical count, the merchandise inventory in general ledger is higher than inventory acutally on hand. The adjusting entry will include:

a debit to and

a credit to ..

The Sales, Cost of Goods Sold and expense accounts have the normal balances. In order to close these temporary accounts, select "Debit" or "Credit" for the following closing entries:

Sales

Income Summary

Income Summary

.. Sales Returns & Allowances Sales Discounts

Cost of Goods Sold Answer Freight Out