Which of the Following Best Explains Inventory Shrinkage Under the Perpetual

Multiple Choice

Which of the following best explains inventory shrinkage under the perpetual inventory system?

A) It is the discount taken by the buyer for early payment of an invoice.
B) It is the damaged merchandise returned by the buyer to the seller.
C) It is the amount that is entered on a cash register and recorded in the accounts by increasing inventory.
D) It is the difference between the physical count of inventory and the balance of the inventory account.