Shrinkage is measured by comparing the cost of inventory on the books to the cost of inventory physically counted.

Question

Quizplus · Accepted Answer

Shrinkage is indeed measured by comparing the cost of inventory on the books (recorded in the accounting system) to the cost of inventory physically counted during a physical inventory count. This helps to identify any discrepancies or losses due to theft, damage or other reasons.

Shrinkage Is Measured by Comparing the Cost of Inventory on the Books