All of the following statements regarding inventory shrinkage are true except:
A)Inventory shrinkage refers to the loss of inventory.
B)Inventory shrinkage is determined by comparing a physical count of inventory with recorded inventory amounts.
C)Inventory shrinkage is recognized by debiting an operating expense.
D)Inventory shrinkage is recognized by debiting Cost of Goods Sold.
E)Inventory shrinkage can be caused by theft or deterioration.

Question

Quizplus · Accepted Answer

Inventory shrinkage is recognized by debiting "Cost of Goods Sold," not an operating expense.

All of the Following Statements Regarding Inventory Shrinkage Are True