If the perpetual inventory master files show lower quantities of inventory than the physical count, one explanation of the difference might be unrecorded sales.

Question

Quizplus · Accepted Answer

If the perpetual inventory master files show lower quantities of inventory than the physical count, it is more likely that there are errors in recording purchases or inventory adjustments, rather than unrecorded sales. Unrecorded sales would result in higher quantities of inventory in the master files, not lower.

If the Perpetual Inventory Master Files Show Lower Quantities of Inventory