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Inventory at December 31, 2021 was overstated by P 20,000. What would be the adjusting entry if the error was discovered at December 31, 2022? a. Debit - Retained Earnings, P 20,000; Credit - Inventory, January 1, 2022, P 20,000. b. Debit - Inventory, January 1, 2022, P 20,000; Credit - Retained Earnings, P 20,000. c. Debit - Cost of Sales, P 20,000; Credit - Inventory, January 1, 2022, P 20,000. d. No adjusting entry is necessary

Inventory at December 31, 2021 was overstated by P 20,000. What would be the adjusting entry if the error was discovered at December 31, 2022? a. Debit - Retained Earnings, P 20,000; Credit - Inventory, January 1, 2022, P 20,000. b. Debit - Inventory, January 1, 2022, P 20,000; Credit - Retained Earnings, P 20,000. c. Debit - Cost of Sales, P 20,000; Credit - Inventory, January 1, 2022, P 20,000. d. No adjusting entry is necessary

Principles of Accounting Volume 1
Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter10: Inventory
Section: Chapter Questions
Problem 13PA: Company Elmira reported the following cost of goods sold but later realized that an error had been...
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Inventory at December 31, 2021 was overstated by P 20,000. What would be the adjusting entry if the error was discovered at December 31, 2022?

a. Debit - Retained Earnings, P 20,000; Credit - Inventory, January 1, 2022, P 20,000.
b. Debit - Inventory, January 1, 2022, P 20,000; Credit - Retained Earnings, P 20,000.
c. Debit - Cost of Sales, P 20,000; Credit - Inventory, January 1, 2022, P 20,000.
d. No adjusting entry is necessary
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