All of the Following Statements Regarding Inventory Shrinkage Are True

Multiple Choice

All of the following statements regarding inventory shrinkage are true except:

A) Inventory shrinkage refers to the loss of inventory.
B) Inventory shrinkage is determined by comparing a physical count of inventory with recorded inventory amounts.
C) Inventory shrinkage is recognized by debiting an operating expense.
D) Inventory shrinkage is recognized by debiting Cost of Goods Sold.
E) Inventory shrinkage can be caused by theft or deterioration.