Which of the following statements regarding shrinkage is not correct?
A) Perpetual inventory systems can help managers detect shrinkage.
B) Shrinkage is another term for inventory loss due to theft, error, or fraud.
C) Shrinkage is detected by comparing the balance in the inventory ledger account and the results of the physical inventory count.
D) It is easier to detect shrinkage in a periodic inventory system than in a perpetual inventory system.

Question

Quizplus · Accepted Answer

It is easier to detect shrinkage in a perpetual inventory system than in a periodic inventory system because perpetual inventory systems continuously track inventory levels and provide real-time information on inventory balances, making it easier to identify discrepancies and detect shrinkage.

Which of the Following Statements Regarding Shrinkage Is Not Correct