Indicate Whether Each of the Following Statements Is True or False

question 28

Essay

Indicate whether each of the following statements is true or false. (Assume a perpetual inventory system.)
_____ a) In a perpetual inventory system, an employee theft is discovered immediately.
_____ b) No adjusting entry is required for inventory losses under a perpetual inventory system.
_____ c) Inventory shrinkage is calculated as the difference between the beginning and ending balances in the merchandise inventory account.
_____ d) In a perpetual inventory system, adjustments for lost, damaged or stolen merchandise are recorded as expenses.
_____ e) The adjusting entry to record inventory losses due to employee theft or shoplifting has a negative effect on the statement of cash flows.

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Definitions:

Compromise

An agreement or a settlement of a dispute that is reached by each side making concessions.

Revolutionary War

The war of independence fought by the Thirteen American Colonies against British rule from 1775 to 1783, resulting in the founding of the United States of America.

Violence

The use of physical force with the intent to harm, damage, or kill someone or something.

Virginia

A U.S. state located in the Southeastern and Mid-Atlantic regions, notable for its significant historical contributions to the country, including being the site of the first permanent English settlement in America at Jamestown.