The Adjusting Entry to Reflect Inventory Shrinkage Is a Debit

question 207

True/False

The adjusting entry to reflect inventory shrinkage is a debit to Income Summary and a credit to Inventory Shrinkage Expense.

---

Definitions:

Cash Dividends

Distributions of a company's earnings to shareholders in the form of cash.

Selling and Administrative Expenses

Costs related to the day-to-day operations of a business, excluding manufacturing expenses.

Internal Rate of Growth

The maximum rate at which a firm can grow its sales and revenue without needing to increase external financing, relying solely on its own profits.