Shrinkage

question 43

Multiple Choice

Shrinkage

• A)Is recognized by debiting Cost of Goods Sold.
• B)Is not able to be directly measured by a perpetual inventory system.
• C)Refers to the loss of inventory for merchandising companies.
• D)Can arise because of theft and deterioration of merchandise.
• E)All of these answers are correct.

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Definitions:

Pacific Ring of Fire

An area in the basin of the Pacific Ocean where a large number of earthquakes and volcanic eruptions occur in a horseshoe shape.

Composite Volcanoes

Volcanoes characterized by explosive eruptions, steep slopes, and composition of alternating layers of lava and ash.

Drains the Volcano

The process by which magma, gases, or fluids are released from the volcano, reducing pressure within the magma chamber.

Upwind

In the direction from which the wind is coming, often used to describe exposure to substances carried by the wind.