Thompson Company maintains perpetual inventory records. Thompson determined through a physical count that it had $$10,300$ of merchandise inventory on hand at the end of the accounting period. The balance in the Merchandise Inventory account in the general ledger was $$10,700.$ The impact of the adjusting entry on the financial statements is

Question $10$ options:

a$)$

Merchandise Inventory increased $$400$

b$)$

Cost of Goods Sold increased $$400$

c$)$

Gross margin increased $$400$

d$)$

Cash flow for operating activities decreased $$400$