Which of the Following Would Probably NOT Cause Inventory Shrinkage

question 71

Multiple Choice

Which of the following would probably NOT cause inventory shrinkage?

• A) Employee theft
• B) Spoilage of items
• C) Spills of items
• D) Correct counting of all inventory
• E) Customer theft

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Definitions:

Manufacturing Overhead

Covers all indirect costs associated with manufacturing a product, including expenses such as rent for the manufacturing space, utilities, and salaries for employees not directly producing goods.

T-Accounts

A visual representation of accounts used in double-entry bookkeeping, showing debits on the left and credits on the right.

Direct Materials Cost

The expense incurred for raw materials that are directly incorporated into a finished product.

T-Accounts

A simplified form of accounting ledger that uses a two-column format to show the increases and decreases in different financial accounts.