The Physical Count of Inventory of a Retailer Was Higher

question 65

Multiple Choice

The physical count of inventory of a retailer was higher than shown in its perpetual records. Which of the following could explain the difference?

• A)Inventory items had been counted but tags placed on the items had not been taken off the items and added to the inventory accumulation sheets.
• B)Credit memos for several items returned by customers had not been prepared.
• C)No journal entry had been made on the retailer's books for several items returned to its suppliers.
• D)An item purchased "FOB shipping point" had not arrived at the date of the inventory count and had not been reflected in the perpetual records.

---

Definitions:

Pricing Infatuation

An obsession or excessive focus on the pricing aspect of a product or service rather than its value or other attributes.

Price Cutting

A competitive strategy whereby a company lowers its product prices to attract customers and increase market share.

Sales Volume

The total number of units of a product sold within a specific time period.

Component Parts

The elements or individual items that, when combined, form a complete product or system.