All of the following statements regarding inventory shrinkage are true except:

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


Answer: B

Business

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What will be an ideal response?

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