An Entity's Physical Count of Inventories Was Lower Than the Inventory

question 30

Multiple Choice

An entity's physical count of inventories was lower than the inventory quantities shown in its perpetual records. This situation could be the result of the failure to record

• A) Sales.
• B) Sales returns.
• C) Purchases.
• D) Purchase discounts.

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Definitions:

Opportunity Cost of Shirking

The benefits a worker forgoes by choosing to shirk (reduce their level of effort or productivity) at work, which could include potential wage increases, promotions, or job security.

Shirking

The action of avoiding or escaping from work or duties.

Monitoring Costs

Expenses involved in overseeing and controlling the performance of a business or investment.

CEO's Pay

The compensation package, including salary, bonuses, and benefits, provided to the Chief Executive Officer of a company.