Which of the following statements regarding inventory shrinkage is not true? Multiple Choice Inventory shrinkage refers to the loss of inventory Inventory shrinkage is determined by comparing a physical count of inventory with recorded inventory amounts. Inventory shrinkage is recognized by debiting an operating expense. Inventory shrinkage is recognized by debiting Cost of Goods Sold. Inventory shrinkage can be caused by theft or deterioration,
· Correct Answer = Option #3: Inventory shrinkage is recognised by debiting an operating expense is NOT TRUE.
· Such shrinkage is debited to Cost of Goods Sold.