If the physical inventory is less than the amount in the accounting inventory records, this is known as
A) Inventory Short/Over
B) Inventory Shrinkage
C) Inventory Adjustment
D) Inventory Discrepancy

Question

Quizplus · Accepted Answer

Inventory Shrinkage is the term used when the physical inventory count is less than the amount in the accounting inventory records. This can be caused by theft, errors in recording or tracking inventory, or damage or loss during transportation or storage. It is important for businesses to identify and monitor inventory shrinkage as it can have a significant impact on their financial statements and profitability.

If the Physical Inventory Is Less Than the Amount in the Accounting