An entity's physical count of inventories was lower than the inventory quantities shown in its perpetual records. This situation could be the result of the failure to record
A) Sales.
B) Sales returns.
C) Purchases.
D) Purchase discounts.

Question

Quizplus · Accepted Answer

If sales are not recorded, the inventory would be reduced physically but not in the perpetual records, leading to a discrepancy where the physical count is lower than the recorded inventory.

An Entity's Physical Count of Inventories Was Lower Than the Inventory