COST ACCOUNTING
INVENTORY AND PRODUCTION MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Which of the following is NOT a common cause of inventory shrinkage?
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Unexpectedly high sales
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product breakage
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data input errors
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theft
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Explanation:
Detailed explanation-1: -There are four main causes of shrinkage: shoplifting, employee theft, administrative errors, and fraud. Understanding how shrinkage happens in retail stores is the first step in reducing and preventing it.
Detailed explanation-2: -For example, assume that company ABC owns $100, 000 of inventory recorded in its accounting books for a specific accounting period. If the company conducts stock inventory and finds the stock on hand to be $95, 000, the amount of stock shrinkage is $5, 000 ($100, 000 – $95, 000).
There is 1 question to complete.