The Adjusting Entry to Account for Normal Inventory Shrinkage Involves

question 198

Multiple Choice

The adjusting entry to account for normal inventory shrinkage involves

• A) a debit to Inventory and a credit to Cost of Goods Sold
• B) a debit to Cost of Goods Sold and a credit to Inventory
• C) a debit to Inventory Shrinkage and a credit to Inventory
• D) a debit to Inventory and a credit to Inventory Shrinkage

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Definitions:

Mislaid

Refers to property that is intentionally placed somewhere but then forgotten, implying it can be recovered by the owner.

Abandoned

A state where a property or a project has been left forth by its owner or tenant without any intention to return and claim or resume its use.

Safety-deposit Boxes

Secured containers held within banks or vaults where individuals can store valuable items or documents for protection.

Bailor

The party in a bailment contract who temporarily transfers possession but not ownership of a property or good to another party.