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As a reduction to merchandise inventory
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∙ 11y ago
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The adjustment to record inventory shrinkage would increase merchandise inventory?
yes
Define inventory shrinkage?
Inventory shrinkages occurs when good disappear from a company's inventory for an unknown reason. For example employee theft or damage.
Is insurance on inventory a direct expense?
insurance is an indirect expense.............
How to compute loss from shrinkage at cost and at retail?
Two accounts are used - There will be a merchandise account and create an Expense due to Shrinkage Account if an asset of $100 is lost due to shrinkage credit the merchandise account, debit the loss due shrinkage account after that in income statement list under exchange account
Cost of inventory should be classified as?
expense
How does a company that uses the perpetual inventory system determine the amount of inventory shrinkage?
By taking a physical count. They will take their recorded amount and subtract the physical count to analyze inventory shrinkage.
The adjustment to record inventory shrinkage would increase merchandise inventory?
yes
Define inventory shrinkage?
Inventory shrinkages occurs when good disappear from a company's inventory for an unknown reason. For example employee theft or damage.
Is insurance on inventory a direct expense?
insurance is an indirect expense.............
What does shrinkage means in retail?
Shrinkage is the difference between the stock on the inventory book and the actual physical stock. Shrinkage is also deifned as the difference between the value ( retail price ) of the stock on the inventory book and the value of the ( retail price ) actual physical stock. Shrinkage % is calculated as the difference between the value ( retail price ) of the stock on the inventory book and the value of the ( retail price ) actual physical stock by the retail sales of this volume
How to compute loss from shrinkage at cost and at retail?
Two accounts are used - There will be a merchandise account and create an Expense due to Shrinkage Account if an asset of $100 is lost due to shrinkage credit the merchandise account, debit the loss due shrinkage account after that in income statement list under exchange account
Cost of inventory should be classified as?
expense
Is freight in considered a cost of purchasing inventory?
yes.....direct expense..
How should expenses be recorded?
How to correct misclassification of rent expense? It was recorded as rent expense, should have been recorded as prepaid rent with an effective tax rate of 30%.
How do you reduce Inventory Shortage Shrinkage?
You should offset it to Cost of Goods sold. It should be done thru Write-off of Goods.
Is inventory write off a non cash expense?
It is non cash since you credit the inventory account rather than cash.
How does product cost become an asset and than an expense?
when units of inventory are sold
