Respuesta :
Shrinkage exists the industry term for inventory and cash losses from shoplifting damage to merchandise and employee theft.
What is Shrinkage?
Inventory shrinkage happens when a store has fewer things in stock than what is listed on the inventory list as a result of a typing error, or because products are harmed, stolen, or lost between the point of production and the point of sale. Profits are impacted because of this because of significant shrinking.
Inventory loss due to issues like employee theft, shoplifting, human mistake, vendor fraud, damage, and cashier error is known as shrinkage. Shrinkage is the discrepancy between the inventory that is recorded on a company's balance sheet and the inventory that really exists.
According to the matching principle, inventory shrinkage must be documented as an expense in the financial period in which it happened in order to be compared to the year's revenues. The Cost of Goods Sold (COGS) account will be updated with a shrinking expense account.
Hence, Shrinkage exists the industry term for inventory and cash losses from shoplifting damage to merchandise and employee theft.
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