While Observing an Entity's Annual Physical Inventory, an Auditor Recorded

Multiple Choice

While observing an entity's annual physical inventory, an auditor recorded test counts for several items and noticed that certain test counts were higher than the recorded quantities in the entity's perpetual records. This situation could be the result of the entity's failure to record:

A) purchase discounts.
B) purchase returns.
C) sales.
D) sales returns.