In Order to Calculate Shrinkage

question 21

Multiple Choice

In order to calculate shrinkage:

• A)both periodic and perpetual inventory systems are needed.
• B)a periodic inventory system is most effective.
• C)a perpetual inventory system requires an occasional count of actual inventory.
• D)it does not matter which system one uses.

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Definitions:

Stockholders' Equity Section

The portion of the balance sheet that represents the ownership interest of shareholders in a company.

Date of Record

The specific date on which a company determines the eligible shareholders for receiving dividends or other corporate distributions.

Stock Dividend

A dividend payment made in the form of additional shares rather than cash, increasing the total number of shares owned by shareholders.

Par Value

Refers to the nominal or face value of a bond, stock, or coupon as stated by the issuer.