On December 31,2014,you count 300 tie clips in inventory.During the next quarter,you carefully record the effect of each purchase and sale transaction on inventory.You buy 128 tie clips during the next quarter.On March 31,2015,you count 288 tie clips in inventory.Which of the following is not true?

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Quizplus · Accepted Answer

The question does not provide any information about the possibility of shrinkage, so it cannot be determined whether shrinkage has occurred or not. The other statements are true based on the information given in the question. The ending inventory on March 31, 2015 is 288, indicating that 12 tie clips have been sold (300 beginning inventory - 128 purchases + 12 sold = 184 ending inventory). The question states that the company uses the perpetual inventory method, which means that inventory levels are continuously updated for every purchase and sale transaction. Using this method, the company's records should show that 140 tie clips were sold during the quarter.

On December 31,2014,you Count 300 Tie Clips in Inventory