Which of the Following Statements Regarding Shrinkage Is Not Correct

Multiple Choice

Which of the following statements regarding shrinkage is not correct?

A) Perpetual inventory systems can help managers detect shrinkage.
B) Shrinkage is another term for inventory loss due to theft, error, or fraud.
C) Shrinkage is detected by comparing the balance in the inventory ledger account and the results of the physical inventory count.
D) It is easier to detect shrinkage in a periodic inventory system than in a perpetual inventory system.